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-armed missile.

Supreme Leader Ayatollah Ali Khamenei repeated Iran's insistence that suspicions about its nuclear programme were baseless. But the U.S.-led campaign for more sanctions against Tehran appeared to be gaining ground.

Russian Foreign Minister Sergei Lavrov indicated that Moscow's patience was wearing very thin.

"We are very alarmed and we cannot accept this, that Iran is refusing to cooperate with the IAEA," Lavrov told the Ekho Moskvy radio station in an interview.

"For about 20 years, the Iranian leadership carried out its clandestine nuclear programme 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 but they are rather serious and we need to understand how several documents concerning military nuclear technology found their way to Iran," Lavrov said.

"Clear explanations are needed."

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 nu clear bomb.

SANCTIONS?

The Kremlin has repeatedly said that further sanctions might have to be imposed if Tehran failed to cooperate with the IAEA.

The Foreign Ministry on Friday 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," Foreign Ministry spokesman Andrei Nesterenko said.

"However, given the current circumstances, we cannot fully rule out the possibility of starting this work."

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 Foreign Minister Guido Westerwelle said European capitals were coordinating on a joint response following the latest IAEA report.

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."