Vienna, Austria ? Iran moved closer to referral to the U.N. Security Council over its atomic program Friday, but a U.S.-Egyptian dispute about linking the issue to a Middle East nuclear-free zone – and indirectly to Israel – threatened to delay a decision.

Diplomats at a meeting of the International Atomic Energy Agency’s 35-nation board were still hopeful late Friday that the gathering would decide on referral when it reconvenes today.

A majority of board members back referral, but the timing remained in doubt after the United States and Egypt tangled over the issue of indirectly linking long-standing Arab demands that Israel, generally considered a nuclear power, give up such arms with demands on Iran to dispel suspicions about its atomic ambitions.

Diplomats familiar with the issue said France, Britain and Germany – the three European nations formally submitting the U.S.-backed draft resolution calling for referral – were trying to mediate between Cairo and Washington.

The diplomats, who demanded anonymity in exchange for discussing the negotiations, said U.S. Secretary of State Condoleezza Rice and Egyptian counterpart Ahmed Aboul Gheit also were involved in trying to iron out language acceptable to both sides.

European diplomats expressed annoyance with both sides as negotiations dragged into the evening and language on a nuclear-free Middle East was first inserted, then deleted and finally reinserted in compromise language.

A Western diplomat at the meeting said the United States felt strongly about not linking its ally Israel to nuclear concerns in the Middle East when it considers Iran the real threat in the region.

Iran claims its program is peaceful and aimed only at generating electricity.