MOSCOW- Russia said on Friday it was very alarmed by Iran's failure to cooperate with the IAEA, after the U.N. nuclear agency said it feared Tehran might be working to develop a nuclear missile.

Supreme Leader Ayatollah Ali Khamenei repeated Iran's insistence that suspicions about its nuclear program were baseless. But the United States said the IAEA report lent weight to its campaign for more sanctions against Tehran.

We are very alarmed and we cannot accept this, that Iran is refusing to cooperate with the IAEA, Russian Foreign Minister Sergei Lavrov told the radio station Ekho Moskvy.

For about 20 years, the Iranian leadership carried out its clandestine nuclear program without reporting it to the IAEA, he said. I do not understand why there was such secrecy.

The IAEA on Thursday made public its concerns over a classified analysis which concludes that Iran already has explosives expertise relevant to a workable nuclear weapon.

Some questions remain on the table and Iran has so far not reacted to them, Lavrov said. We need to understand how several documents concerning military nuclear technology found their way to Iran.

Russia -- which wields a veto in the United Nations Security Council -- has in recent weeks raised suspicions publicly about Iran's nuclear activities, after for years saying it had no evidence Tehran was seeking to build a nuclear bomb.

Foreign Ministry spokesman Andrei Nesterenko hinted that talks on a sanctions resolution could start soon.

No work is in progress at the U.N. Security Council in New York today to prepare a possible sanctions-based resolution on Iran ... However, given the current circumstances, we cannot fully rule out the possibility of starting this work.

But Moscow reiterated its position that it will not block an export of S-300 air defense missile systems to Iran, something the United States and Israel say may help Iran protect its nuclear facilities from any future air strikes.

There is a contract to supply these systems to Iran, and we will fulfill it, Deputy Foreign Minister Sergei Ryabkov told Interfax. It is absolutely incorrect to put the emphasis on the issue of S-300 supplies. [ID:nLDE61I25W]

Washington's U.N. Ambassador Susan Rice said the IAEA report plainly underscores that Iran continues to flout its international obligations.

The nuclear watchdog's comments showed the urgency of making the choice real to Iran that it could engage and uphold its international obligations or, on the contrary, face increased international pressure, she told reporters.

Germany, one of the six powers negotiating with Iran on the nuclear issue, added its voice to the pressure.

The persistent defiance ... of United Nations resolutions and Tehran's continuation of a dangerous nuclear policy are forcing the international community to pursue further comprehensive sanctions in New York against the regime in Tehran, government spokesman Ulrich Wilhelm said.

But he added: We rule out a military solution. The United States says it wants a diplomatic solution but has not ruled out military action.

German exporters called on Friday for tough sanctions, even though Germany is among Iran's biggest trading partners, exporting more than 3.3 billion euros' worth of goods in 2009.

Khamenei was quoted as saying by Iranian media: The West's accusations are baseless because our religious beliefs bar us from using such weapons ... We do not believe in atomic weapons and are not seeking that.

(Writing by Guy Faulconbridge and Steve Gutterman; Editing by Robin Pomeroy)

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