The head of the International Atomic Energy Agency (IAEA) Mohamed ElBaradei said yesterday that Iran's agreement in August to a plan for resolving outstanding verification issues was "an important step in the right direction."

Addressing the UN General Assembly at the UN Headquarters, ElBaradei said it was regrettable that Iran had not suspended its enrichment-related activities and continued to build the heavy water reactor at Arak, contrary to Security Council decisions calling on it to take confidence-building measures.

He said the IAEA had been unable to verify certain important aspects relevant to the scope and nature of Iran's nuclear program.

But Iran and the IAEA had agreed in August on a work plan for resolving outstanding verification issues, he said.

"Iran's agreement to that plan was, therefore, an important step in the right direction," he stressed, noting that Iran's active cooperation and transparency were key in that regard.

"If the Agency were able to provide credible assurance about the peaceful nature of Iran's past and current nuclear program, this would go a long way towards building confidence," he said, adding that he would report on the implementation of the plan to the agency's Board of Governors next month.

The United States and some other Western countries fear Iran may try to develop atomic bombs under a civilian cover, however, Tehran insists its nuclear program is for peaceful purposes only.

The UN Security Council has already issued two sanction resolutions against Iran's nuclear program since last December, but both of them failed to persuade the Islamic Republic to give up uranium enrichment work.

Washington now is trying to push the UN Security Council to adopt a third resolution against Tehran's defiance, but Iran's cooperation with the IAEA and the EU in the past months has let other world powers agree to wait ElBaradei's report until November to make their decision.