The new findings come despite claim by Tehran in November that it had fully disclosed its nuclear program and at a time of heightened concern about nuclear proliferation after the discovery of the rogue procurement network headed by Abdul Qadeer Khan, the so-called father of Pakistan's nuclear bomb, "The Financial Times" of London reported in a dispatch from New York.

Western officials told the Financial Times that the IAEA's findings in Iran would be included in a progress report prepared by Mohammad ElBarade’i, the agency's director general, ahead of the IAEA's board meeting in March.

Washington is highly critical of a compromise agreement reached on 21 October between foreign Minister of Britain, France and Germany with Iran which stipulates that the Islamic Republic had agreed to sign the additional protocol to the Non Proliferation Treaty and suspends its uranium enriching program, activities that is had kept secret from inspections.

In a key speech to the National Defence University, President Bush took aim at nuclear programs in countries like Iran and North Korea and warned that the vast black-market operation run by Pakistan's former top atomic scientist highlighted the scope of the threat posed by proliferation.

"These dealers are motivated by greed, fanaticism or both", the President said, warning that with "the deadly technology and expertise on the market, there's the terrible possibility that terrorist groups could obtain the ultimate weapons".

Bush called for a range of actions aimed at thwarting such ambitions, including revamping the IAEA to enhance its powers, as well as barring nations like Iran from its board.

He said that, by next year, only countries that have signed an agreement giving the IAEA broad powers to conduct intrusive snap inspections should be allowed to import equipment for civilian nuclear programs.

"We must confront the danger with open eyes and unbending purpose and "I've made clear to all the policy of this nation: America will not permit the terrorists and dangerous regimes to threaten us with the world's most deadly weapons".

He gave much of the credit for Pakistani President Pervez Musharraf's action against Khan to the groundwork laid over several years by U.S. intelligence.

"We will find the middlemen, the suppliers and the buyers," Bush said. "Our message to proliferators must be consistent and it must be clear: 'We will find you, and we're not going to rest until you are stopped.'"

Despite western suspicions that Iran wants to develop nuclear weapons, the IAEA said in November that it had not yet found evidence that Iran's program to develop the nuclear fuel cycle was aimed at anything more than energy production.

To the frustration of the Europeans, Tehran is believed to have continued to assemble centrifuges, which European governments consider a failure to fulfill obligations under the agreement.