Vienna, Austria ? Iran has ignored a U.N. Security Council ultimatum to freeze uranium enrichment – a possible pathway to nuclear arms – and instead has expanded its program by setting up hundreds of centrifuges, the U.N. nuclear watchdog agency said Thursday. The finding paves the way for new U.N. sanctions.

Hours later, the United States said key countries would meet next week to try to develop a new U.N. resolution on the standoff.

The International Atomic Energy Agency said in a report to the Security Council and its 35-nation board that Tehran also has continued to build a heavy water reactor and related facilities that, along with enrichment, could help it develop nuclear arms.

In addition, the report said Iran ignored a Security Council call to cooperate with the IAEA in its efforts to shed light on suspicious nuclear activities.

The conclusions, while widely expected, were important because they could serve as the trigger for the council to start deliberating on new sanctions meant to punish Tehran for its nuclear intransigence.

In Washington, Undersecretary of State Nicholas Burns said he would travel Monday to London to meet with U.S. negotiating partners to try to draft a new resolution on Iran.

“It is effectively thumbing its nose at the international community,” he said of Iran.

Burns said he hoped the United States and other permanent members of the U.N. Security Council, plus Germany, could quickly draft a resolution to “see Iran repudiated again.” He said it was too soon to say what provisions the resolution might contain.

In Tehran, the deputy head of Iran’s Atomic Energy Organization, Mohammed Saeedi, ruled out suspending enrichment, saying such demands were against Iran’s “rights, the Nuclear Nonproliferation Treaty and international regulations.”

The council issued three demands to Iran on Dec. 23: freeze uranium enrichment, stop building heavy water facilities and fully cooperate with the IAEA. It introduced limited sanctions and gave Iran 60 days to comply – a deadline that expired Wednesday.

The IAEA report prepared by director Mohamed ElBaradei showed Tehran has instead expanded its enrichment efforts – setting up nearly 1,000 uranium-spinning centrifuges in and above an underground bunker, enriching minute amounts of uranium and bringing nearly 9 tons of the gaseous feedstock into its underground nuclear facility at Natanz in preparation for enrichment.