The United States on Wednesday demanded Iran provide detailed answers about its nuclear program after a critical report from the UN atomic watchdog, as Tehran warned it might suspend cooperation with the agency.

"The Iranians have a lot of explaining to do about the IAEA report, which essentially sees them as not cooperating on some very important, dark questions that the international community has about their programs," US Secretary of State Condoleezza Rice said Wednesday.

Traveling to a conference on Iraq outside Stockholm, Rice referred to the "serious concern" voiced by the International Atomic Energy Agency that Iran was hiding information about alleged studies into making nuclear warheads and defying United Nations demands to suspend uranium enrichment.

The IAEA report prompted a warning from Iran's new parliament speaker Ali Larijani, who said the country could review its relations with the UN watchdog.

"Unfortunately, in certain parts it spoke in an ambiguous way. This was used by the media, as you have seen, in the last days. This attitude of the agency is regrettable," he said in the speech broadcast live on state radio.

"Parliament will not allow that such deceptions are made and if they continue along this path, the new parliament will intervene in the case and set a new line for cooperation with the IAEA."

The parliament speaker did not say how Iran could alter its cooperation, but any move from Tehran to limit IAEA talks or inspections would raise tensions in the standoff.

The report marked a tougher line from the IAEA, which has spent four years investigating the Iranian nuclear drive but has never drawn a conclusion over its nature.

The United States and its European allies fear Iran wants to use the sensitive process of uranium enrichment to make an atomic weapon. Tehran insists its drive is entirely peaceful.

In Washington, US national security adviser Stephen Hadley warned Wednesday that it would not let Iran "stall" the world with nuclear negotiations while Tehran pursues what the West fears is a clandestine plan to build atomic weapons.

"We cannot allow the Iranian regime to use negotiations to stall for time, hedge its bets and keep open an indigenous route to a nuclear weapon," Hadley said in a speech.

"If there is one thing I hope we can all agree on, it is that a nuclear-armed Iran would be disastrous for the peace of the Middle East and the world," Hadley told representatives of some 80 countries gathered to mark five years since the founding of the Proliferation Security Initiative (PSI).

Rice said the United States is going to "continue along the two tracks" of offering Tehran incentives if it halts uranium enrichment and pushing for toughened sanctions if it fails to do so.

The United States, France, Britain, Russia and China -- which make up the five permament veto-wielding members of the UN Security Council -- have drafted a "refreshed" package of incentives that they hope to offer Iran.

The State Department said the plan to deliver the package has not been affected by the IAEA report on Monday.

The UN Security Council has imposed three rounds of gradually tougher sanctions on Iran for its refusal to halt uranium enrichment work.

In recent weeks, Iran has held talks with the IAEA to examine the allegations that Tehran has studied how to design nuclear weapons. The claims stem from intelligence provided to the IAEA by some member states.

Echoing the US response, British Foreign Secretary David Miliband said Iran "needs to provide answers immediately, and come clean about its past activities."

In Berlin, German Foreign Minister Frank-Walter Steinmeier said the report "leaves open a number of questions that we will have to examine very quickly."

Larijani's warning carries weight as its comes from one of the key Iranian figures in the nuclear standoff.

He served as top nuclear negotiator between 2005-2007, holding several rounds of talks with the European Union, before resigning due to differences with President Mahmoud Ahmadinejad.

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