Foreign ministers from the UK, France and Germany have said the time has come for Iran's nuclear issue to be dealt with by the UN Security Council.
Western powers suspect Iran's nuclear ambitions are not peaceful
They called for an emergency session of the UN's nuclear watchdog, which can refer Iran to the council and lead to possible sanctions.
US Secretary of State Condoleezza Rice backed the move, saying Iran had crossed an "important threshold".
Iran, which resumed nuclear research this week, said it was not worried.
And UN Secretary General Kofi Annan told the BBC Iranian officials had told him they remained "interested in serious and constructive negotiations".
The US and members of the EU have accused Iran of covertly seeking to develop nuclear weapons, a charge Iran denies.
In a joint press conference with his UK and French counterparts after emergency talks in Berlin, German Foreign Minister Frank-Walter Steinmeier said two-and-half years of negotiations between Germany, France, the UK - the so-called EU three - and Iran could go no further.
IRAN'S NUCLEAR STANDOFF
Sept 2002: Work begins on Iran's first reactor at Bushehr
Dec 2002: Satellites reveal Arak and Natanz sites triggering IAEA inspections
Nov 2003: Iran suspends uranium enrichment and allows tougher inspections
June 2004: IAEA rebukes Iran for not fully co-operating
Nov 2004: Iran suspends enrichment under deal with EU
Aug 2005: Iran rejects EU plan and re-opens Isfahan plant
Jan 2006: Iran re-opens Natanz facility
He said the EU's confidence had been "repeatedly tested" by Iran, adding that Iran's resumption of work at the Natanz nuclear enrichment facility on Tuesday constituted a "unilateral rejection" of the talks process.
"We believe the time has now come for the Security Council to become involved to reinforce the authority of IAEA [International Atomic Energy Agency] resolutions," Mr Steinmeier said.
UK Foreign Secretary Jack Straw said extensive proposals had been made to Iran, including the prospect of World Trade Organization membership.
The US secretary of state meanwhile gave the EU three Washington's firm backing.
Speaking to reporters, Condoleezza Rice said Iran was "in dangerous defiance of the entire international community".
A Russian foreign ministry spokesman, Vladimir Ivanov, told the BBC that his country also did not exclude the possibility of referring Iran to the Security Council.
Russia has previously defended Iran's right to nuclear technology.
Iran meanwhile dismissed the threat of Security Council action.
"We should not be worried," said Abdolreza Rahmani Fazli, deputy to Iran's chief nuclear negotiator, Ali Larijani.
Following the European ministers' meeting, the UN chief called Mr Larijani and urged him to "avoid any escalation, to exercise restraint, go back to give the negotiations a chance".
Mr Larijani told him Iran remained "interested in serious and constructive negotiations, but within a time-frame".
The crisis over Iran's nuclear programme intensified this week after Iran removed seals at three nuclear facilities, including a uranium enrichment plant at Natanz, following a two-year freeze.
Since last August, Iran has resumed all nuclear activity apart from enrichment, which can produce fuel for power stations or, under certain conditions, for bombs.
Iran insists its nuclear programme is for peaceful purposes only.