Mohamed ElBaradei, the head of the United Nations nuclear guardian, today urged Western and Iranian leaders to remain calm as Tehran was officially referred to the Security Council.

"What we need now, at this stage, is a cool-headed approach. The Middle East is a very volatile area," he said as a three-day meeting of the International Atomic Energy Agency drew to a close in Vienna.

Mr ElBaradei insisted that the decision to refer his classified report on Iran's nuclear programme to the powerful Security Council - which is expected to meet next week to discuss possible punitive measures - marked a "new phase in diplomacy" and not a fast-track to sanctions.

The call for calm was directed at both Iran and the United States, who have traded threats from the sidelines throughout the course of the week's negotiations. It came shortly after a senior official from Tehran told Reuters: "The United States may have the power to cause harm and pain but it is also susceptible to harm and pain. So if the United States wishes to choose that path, let the ball roll."

The official was apparently responding to comments from Dick Cheney, the Vice President, who said Iran would face "meaningful consequences" if it failed to fall into line.

Mr ElBaradei said he regretted that a Russian compromise and a prolonged diplomatic effort by the European Union failed. He added: "This is an issue that will take some time. It’s quite complex. We should not forget that the primary responsibility of the Security Council is peaceful settlement of the dispute."

Iran has threatened to scale up research into industrial-level uranium production if it is threatened with sanctions. It is unclear whether the yet has the technology and techniques to do so but insiders have warned that, if not, it will rapidly obtain them

The US, France and Britain are keen to push for some form of sanctions against the Iranian regime if it refuses to stop uranium enrichment but Russia and China are likely to veto any such attempts.

Sergei Lavrov, the Russian Foreign Minister, insisted that neither sanctions nor military action would prove effective. The United States has refused to rule out military action but both Russia and China have the power to veto any of the Security Council's actions.

"I don’t think sanctions as a means to solve a crisis have ever achieved a goal in the recent history," said Mr Lavrov. "There is no military solution to this crisis."

Philippe Douste-Blazy, the French Foreign Minister, said he was disappointed that Iran had rejected a Russian compromise to allow Iran to carry out its research on Russian soil.

"Once again, Iran has not seized the hand that the Europeans and their main allies, notably Russia, have offered it," he said. He said that France remained convinced that solutions could be found if "sincere and honest" dialogue could get under way.

If the Security Council does take action when it meets next week, its first step is likely to be to issue a demand that Iran stop nuclear activities by a certain deadline. It may then issue a further warning before beginning to consider sanctions.

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