Iranians have responded angrily to US pressure

The report said traces of bomb-grade uranium in Iran's nuclear facilities came from contaminated Pakistani equipment, not Iranian activities.

But the US said there were other ways Iran could be building nuclear weapons.

Iran has always maintained the traces of enriched uranium found two years ago came from contaminated equipment.

The BBC's Pam O'Toole in Tehran says Iran will see the report's findings as a vindication of its position.

Iran insists its nuclear programme is peaceful and that US pressure over its nuclear programme is part of a wider effort to change the regime in Tehran.

However, a US state department spokesman said the report did nothing to reduce their concern at Iran's nuclear programme.

He listed a series of what he called "unresolved concerns", which included Iran's alleged dealings with clandestine nuclear procurement networks and the Bush administration's strong belief that Iran was developing and pursuing a nuclear weapon.

Talks scrapped

The independent report, published on Tuesday by the International Atomic Energy Agency, concluded that traces of uranium found in Iran two years ago came from contaminated equipment imported from Pakistan.

The discovery of the uranium had angered the Bush administration, which accused Iran of developing nuclear weapons in secret.

But the report backed Iran's long-standing claim that the uranium traces came from equipment bought several years ago from Pakistan.

France, Britain and Germany have called off talks with Iran that had been scheduled for 31 August after Tehran resumed uranium conversion.

The French foreign ministry said Iran's decision was in breach of a 2004 agreement to suspend nuclear activity.

If the stand-off continues, the US and the EU might bring the case before the UN Security Council to seek sanctions.

Offer rebuffed

Earlier this month, the EU offered a wide-ranging deal to Iran, including economic, political and technological incentives, in return for the complete suspension of research related to nuclear fuel production.

Iran's chief negotiator says the EU offer was not good enough

French foreign ministry spokesman Jean-Baptiste Mattei said the decision to call off the meeting did not mean "that there will not be any contacts with the Iranians".

But senior Iranian negotiator Hossein Moussavian criticised the move, saying the EU that had failed to recognise Iran's right to peaceful atomic research.

"In Geneva we told the three European ministers clearly that if Europe's proposal did not contain Iran's right to uranium enrichment, it would be rejected and Isfahan (plant) would be restarted," Iran's Mehr news agency quoted him as saying.

The US voiced its support for the European countries' decision to cancel the talks.