The United States and its allies were considering whether to push for sanctions on Iran within the UN Security Council after the Islamic republic refused to freeze its uranium enrichment program, the Wall Street Journal reported yesterday.

Iran delivered its response on Tuesday to a package of incentives, offered in June by Britain, China, France, Russia, the United States and Germany. Iran called for more talks to settle the nuclear issue, but refused to halt uranium enrichment, a key demand by the Security Council.

U.S. and European officials said in private that Iran's reply had fallen short of the requirements set out in the Security Council resolution.

However, the Bush administration held to its official line that the United States was still evaluating Iran's reply to the package, and that the administration needed to confer with its European partners on the issue, the report said.

John Bolton, U.S. Ambassador to the United Nations, said on Tuesday that Washington would study Iran's response carefully.

However, "we are also prepared, if it does not meet the terms set (by the six major powers), to proceed in the Security Council with economic sanctions," Bolton said.

"I think we will be prepared to submit the elements of a resolution in the council very quickly," Bolton added.

The UN Security Council has demanded that Iran stop its uranium enrichment by August 31, or it would face possible sanctions.

The United States has accused Iran of trying to develop nuclear weapons under the cover of a civilian nuclear program. Iran has repeatedly said its nuclear program was aimed at generating power to meet its surging domestic demand.