VIENNA, Sept. 22 (Xinhuanet) -- The European Union (EU) has backed away from its demand for referring Iran's nuclear issue to the United Nations Security Council, sources in Vienna said on Thursday.

    However, the EU insisted Iran has violated the safeguard obligations under the nuclear Non-Proliferation Treaty (NPT), for which Iran still could be reported to the UN Security Council in accordance with Article 12 of the International Atomic Energy Agency (IAEA) Statute.

    Article 12 says that "the (IAEA) Board shall report the non-compliance to all members and to the Security Council and General Assembly of the United Nations."

    On Tuesday, the EU circulated a draft resolution to the IAEA board members, calling for reporting the Iran nuclear issue to "all members of the Agency and to the Security Council and General Assembly of the United Nations" because of "Iran's many failures and breaches of its obligations to comply with its NPT Safeguards Agreement."

    The new draft resolution, finalized on Wednesday night, said Iran's "many failures and breaches" of its obligations to comply with its NPT Safeguards Agreements "constitute non compliance in the context" of Article 12.

    The draft resolution also said Iran's concealment of its history of developing nuclear activities, which is not "exclusively for peaceful purpose," has given rise to "questions that are within the competence of the Security Council."

    Diplomats in Vienna said although the EU's new version of the draft resolution does not spell out the move to report the Iran case to the UN Security Council, it makes clear Iran's failures and breaches of the NPT Safeguard Agreement, which implies that the IAEA may refer the Iran case to the UN Security Council at anytime in the future.

    EU diplomats said they had dropped the demand in the interest of getting a unanimous resolution approved by IAEA board of governors meeting this week.

    The US response to the move is still unknown. On Wednesday, US Ambassador to the IAEA Gregory Schulte called for reporting Iran's case to the UN, listing two "reasons" for the move.

    Sources in Vienna told Xinhua that both the United States and Japan were still insisting the Iran case be reported to the UN Security Council, which has a say over whether to impose sanctions against Iran or not.

    On Thursday morning, the IAEA board of governors meeting continued its debate on the Iran's nuclear issue.

    Russia, China, Brazil and a number of Non-Aligned Movement countries voiced their concerns over the issue. Most of them expressed their dislike of elevating the issue and stuck to resolving the issue within the framework of the IAEA.

    Iran also fought back on Thursday, calling for negotiations in resolving the Iran nuclear issue.

    "Iran believes in negotiations," Iran's ambassador to the IAEA, Mohammad Mehdi Akhondzadeh Basti, told the press after Thursday's morning session.

    Addressing the IAEA board meeting, Akhondzadeh said the international community has exaggerated Iran's breaches of its obligations to the NPT Safeguards Agreement.

    The ambassador refuted the accusations against Iran's " concealment" of its nuclear program, saying it was "incorrect and misleading."

    Western countries have accused Iran of hiding its uranium enrichment program from the International Atomic Energy Agency (IAEA) for 18 years. Akhondzadeh also listed detailed cases to counterattack the accusations from the EU and Australia, saying Iran did not conceal anything for IAEA inspections.

    "Iran has granted unrestricted access during more than 1,300 man-day inspection since 2003, which is unprecedented in the history of the IAEA," he said.

    The ambassador also pointed out that Iranian President Mahmoud Ahmadinejad had put forward a confidence-building measure to invite "private and public sectors of other countries" to participate in " the implementation of the fuel cycle."

    The Iranian president's proposal has drawn "interests" from some countries, the ambassador told the press. Enditem