In its most positive assessment of Iran in two years, the International Atomic Energy Agency reported yesterday that it had found no evidence the nation had a nuclear weapons program and that Tehran's recent cooperation with the agency has been very good.

The U.N. nuclear watchdog's report, along with Europe's acceptance of a wide-ranging nuclear agreement with Tehran, capped a pivotal day for the Islamic republic's relations with the West and left little chance for the Bush administration's Iran strategy to succeed in the near term.

U.S. officials, who agreed to discuss policy on the condition of anonymity, acknowledged that both the IAEA's upbeat tone and the European deal deeply undercut the White House's diplomatic drive to confront Iran now with the prospect of international sanctions.

"We still think they should go to the U.N. Security Council, but it's clear no one is with us on that right now," one senior policymaker said.

Instead, the administration will focus on lobbying IAEA board members to approve more aggressive inspections in Iran and an automatic referral to the Security Council if Tehran breaks any part of the European deal, U.S. policymakers said.

President Bush's senior foreign policy officials are expected to discuss wording for the resolution and a strategy for the IAEA's Nov. 25 board meeting in Vienna over the coming days.

On Sunday, Iran agreed to suspend its nuclear programs in exchange for European guarantees that it will not face the Security Council as long as their agreement holds. Iran has said its programs are for energy production, but the equipment and expertise could also be used for making weapons.

Officials from the State Department and the National Security Council were briefed by European diplomats in Washington yesterday and raised concerns regarding one item in the deal.

In a last-minute concession to Iran, the three European powers agreed that the suspension would begin Nov. 22 and that until then Iran would complete converting up to 15 tons of raw uranium to a state that makes it nearly ready for enrichment. The process still leaves Iran a long way from being able to make bomb-grade uranium, and the converted material would be stored by the IAEA, but its insistence on completing that work worried U.S. officials.

The IAEA said it would start tagging and sealing equipment at other facilities first and move on to the conversion plant on Nov. 22. Inspectors need to complete the verification by the time the IAEA board meets three days later.

"We believe that the conclusion of this agreement can both allow for confidence-building in respect of Iran's nuclear program and represent a significant development in relations between Europe and Iran," British Foreign Secretary Jack Straw said yesterday as he confirmed the deal.

Throughout European capitals there were toasts for the deal, and Javier Solana, the European Union's foreign policy chief, said it started a "new chapter" for Iran.

In addition to the suspension, the agreement commits Iran to support two U.S.-led endeavors: the war against al Qaeda and efforts to establish a democratic government in Iraq. Iran is holding several senior al Qaeda leaders and exerts significant influence in neighboring Iraq.

Secretary of State Colin L. Powell said the deal indicated "a little bit of progress," but no other U.S. official would comment publicly on it. Administration spokesmen said the government was reviewing the IAEA report and the agreement.

In his 32-page report yesterday, IAEA chief Mohamed ElBaradei wrote that "all the declared nuclear material in Iran has been accounted for, and therefore such material is not diverted to prohibited activities," such as weapons programs.

ElBaradei said there he could not rule out the possibility that Iran is conducting a clandestine nuclear weapons program. But its decision to suspend work aimed at developing a new energy source could make it more difficult to pursue a covert program. "It becomes harder to conceal without legitimate activities," said Robert Einhorn, who ran the State Department's nonproliferation bureau until 2001.

Several outstanding issues remain in the Iran investigation, mostly because of missing Iranian paperwork and a lack of cooperation from Pakistan, which supplied much of Iran's nuclear equipment. But ElBaradei wrote that Iran's cooperation had increased and that he would no longer need to issue special reports on a regular basis.

Over 18 years, Iran secretly assembled uranium enrichment and conversion facilities that could be used for a nuclear energy program or to construct an atomic bomb. The underground sites became a target of a massive IAEA investigation after they were exposed by an Iranian exile group two years ago.

Iran, rich in oil and gas, says its efforts are aimed at building a new energy source. But the scale and secrecy of the program fueled suspicions that Tehran planned to develop nuclear weapons.

While the IAEA inspections will continue, Iran and Europe's three main powers will begin talks for a final accord that would give Iran lucrative trade deals with the EU when it permanently halts its nuclear work.

An Iranian diplomat, Hassan Rohani, said the negotiations "will be a matter of months, not years." But European officials insisted the talks will be open-ended to avoid time-pressured negotiations. One European diplomat said Europe expected the negotiations to last two years or more.