US, Europe hope to find compromise on Iran

"There's movement on all sides as we fashion the appropriate response," US Deputy Secretary of State Richard Armitage told PBS television in Washington.

Armitage said the transatlantic allies were not at loggerheads.

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"I would prefer to use a term that we haven't yet reached agreement, rather than do not agree," he said, commenting on talks that began in Vienna last week at the International Atomic Energy Agency (IAEA) but were adjourned until Wednesday due to the deadlock.

The United States has now dropped demands to take Iran before the UN Security Council as US and European diplomats held weekend talks in their capitals on how to crack down on Tehran for hiding sensitive atomic activities, diplomats said.

An IAEA meeting in Vienna was adjourned on Friday until Wednesday after the United States and Europe's big three -- Britain, France and Germany --- had failed in two days of closed-door talks to agree on a resolution on Iran.

The United States, which has labeled Iran part of an "axis of evil" of countries trying to make nuclear weapons, along with North Korea and pre-Saddam Iraq, has sought to get the IAEA to declare Iran in "non-compliance" with the nuclear Non-Proliferation Treaty (NPT).

This move could bring the issue before the UN Security Council, which could then slap sanctions on Iran.