As transatlantic friction over how to deal with the Iranian impasse intensifies, there are fears in European capitals that the nuclear crisis could come to a head this year because of US frustration with Russian stalling tactics at the UN security council. "The clock is ticking," said one European official. "Military action has come back on to the table more seriously than before. The language in the US has changed."

As the Americans continue their biggest naval build-up in the Gulf since the start of the Iraq war four years ago, a transatlantic rift is opening up on several important aspects of the Iran dispute.

The Bush administration will shortly publish a dossier of charges of alleged Iranian subversion in Iraq. "Iran has steadily ramped up its activity in Iraq in the last three to four months. This applies to the scope and pace of their operations. You could call these brazen activities," a senior US official said in London yesterday.

Although the Iranians were primarily in Shia areas, they were not confined to them, the US source said, implying that they had formed links with Sunni insurgents and were helping them with booby-trap bombs aimed at Iraqi and US forces, new versions of the "improvised explosive devices".

Senior members of the US Congress have raised concerns that the US will attack Iran in retaliation for its alleged activities in Iraq. The official said there were no plans for "cross-border operations" from Iraq to Iran. But he said: "We don't want a progressively more confident and bolder Iran ... The perception that Iran is ascendant in the region and that there are no limits to what Iran can do - that's what is destabilising."

The Americans and Europeans have sought to maintain a common front on the nuclear issue for the past 30 months, with the European troika of Britain, France and Germany running failed negotiations with the Iranians and the Americans tacitly supporting them.

But diplomats in Brussels and those dealing with the dispute in Vienna say a fissure has opened up between the US and western Europe on three crucial aspects - the military option; how and how quickly to hit Iran with economic sanctions already decreed by the UN security council; and how to deal with Russian opposition to action against Iran through the security council.

"There's anxiety everywhere you turn," said a diplomat familiar with the work of the International Atomic Energy Agency in Vienna. "The Europeans are very concerned the shit could hit the fan."

A US navy battle group of seven vessels was steaming towards the Gulf yesterday from the Red Sea, part of a deployment of 50 US ships, including two aircraft carriers, expected in the area in weeks.

"No path is envisaged by the EU other than the UN path," the EU's foreign policy chief, Javier Solana, told the Guardian yesterday. "The priority for all of us is that Iran complies with UN security council resolutions."

The IAEA chief, Mohamed ElBaradei, called at the weekend for a "timeout" in the worsening confrontation in an attempt to enable both sides to save face and climb down. But the Americans rejected the proposal and European officials involved in the dispute also believe the Iranians cannot be trusted to stick to a deal.

Despite recurring tensions on the Middle East between the US and France, the French are the most hawkish of the Europeans on Iran and are said to back a US drive to tighten the noose on Iran's president, Mahmoud Ahmadinejad.

The populist and recalcitrant leader is perceived to have been weakened recently, in part because of a mishandling of the nuclear row. "One group of western countries thinks it's a good time to step up the pressure on Ahmadinejad. All options are on the table. Others are worried we might be stumbling into a war," said another diplomat familiar with the dispute.