State Department spokesman Sean McCormack accused Tehran of "inspector shopping" after it banned 38 U.N. inspectors this week from four major Western nations and then said the head of the U.N.'s inspection team, a Belgian, must be removed too.

"It's outrageous," McCormack told reporters. "They are trying to dictate again to international bodies what those international bodies can and can't do in the form of who they are going to send to inspect them."

"The tone of those kinds of actions are indicative of their continued defiance. This is not what the international community is looking for," he added.

The United States is also concerned about Iran's plans to start installing 3,000 centrifuges shortly at its Natanz plant, escalating a modest, experimental enrichment project to what diplomats have called "industrial scale."

UnderSecretary of State Nicholas Burns said any move to speed up their research would lead to tougher sanctions and solidify international opposition to Iran's nuclear program.

"This would be a major miscalculation and mistake by the Iranian government," Burns told reporters. "If they think they can get away with another 3,000 centrifuges without another Security Council resolution and additional international pressure, then they are very badly mistaken."

The United Nations voted last month to impose sanctions on Iran's trade in sensitive nuclear materials and technology to try to stop enrichment work that could produce bomb material.

The United States sees this resolution as a first step in punishing Tehran and would like the United Nations to impose tougher measures if Iran does not change its behavior.

Asked what additional sanctions the United States might explore against Iran, McCormack declined to provide any details and said this would be discussed among U.S. allies.

"Our response will be guided by the facts on the ground," he said.

Earlier on Friday, the head of the U.N.'s atomic agency, Mohamed ElBaradei, called on Iran and the West to declare a "timeout" under which Iranian nuclear work and U.N. sanctions would be suspended simultaneously.

But McCormack reiterated the U.S. position that Washington would only negotiate with Iran once it had suspended its nuclear enrichment program, which Tehran argues is for peaceful power purposes and the West says is aimed at building an atomic bomb.

"The ball is in their court," said McCormack.

In another sign of growing tensions with Iran, the United Nations passed a U.S.-drafted resolution condemning denials of the Holocaust in response to a Tehran conference dominated by speakers questioning the extermination of 6 million Jews in World War Two.

"We think this is an effective action today to repudiate the Iranian government by the United Nations General Assembly and to have more than 100 countries join us is an effective repudiation to (Iranian) President Mahmoud Ahmadinejad's baseless and gross mischaracterization of modern history," said Burns of the U.N. resolution.

Iran disassociated itself from the resolution, calling it a political exercise Israel would exploit against Palestinians. Reuters