The UN Security Council is discussing a resolution introduced by Western countries calling on Iran to suspend enrichment or face further action.
Iran says its programme is designed to meet its energy needs
The ambassadors of France and the US said they hoped the council would approve the resolution soon.
Despite Russian and Chinese opposition, the draft falls under Chapter Seven of the UN Charter, which could, after further decisions, allow for sanctions.
Iran insists its nuclear programme is for peaceful proposes only.
However, Western nations are concerned it is seeking a nuclear weapons capability.
US President George W Bush urged Iran to give up its programme.
"The Iranians must understand that we won't fold, that our partnership is strong, that for the sake of world peace, they should abandon their nuclear weapons ambitions," he said in a White House meeting with German Chancellor Angela Merkel.
Ms Merkel said they both thought there was a good chance of bringing about a diplomatic solution.
On Friday the UN's nuclear watchdog, the International Atomic Energy Agency, issued a report saying Tehran had ignored calls to halt uranium enrichment.
The resolution urges Iran to "suspend all enrichment-related and reprocessing activities, including research and development" and "suspend the construction of a reactor moderated by heavy water".
It threatens to consider "further measures as may be necessary" to ensure compliance - a reference to possible sanctions.
The resolution also calls on all nations to help prevent the transfer of materials and technology "that could contribute to Iran's enrichment-related and reprocessing activities and missile programs".
US Ambassador John Bolton said: "The key to this lies in Iran's hands."
He added: "If they give up the pursuit of nuclear weapons, a lot of things are possible. If they continue to bluster and to threaten and obfuscate and try to throw sand in our eyes, then we're onto a different circumstance."
Chapter 7 Security Council resolutions are binding on all UN members, but do not automatically lead to sanctions or military action. Further decisions would be needed for such measures.
Before a Chapter 7 resolution is passed, the Council has to agree that there is a threat to "international peace and security". China and Russia are yet to support such a resolution and are opposed to sanctions against Iran.
But the UK ambassador to the UN, Emyr Jones Parry, said the five permanent council members were united in not wanting Iran to have a nuclear weapons capability.
"On the detail of the resolution, there have been exchanges of views and those will continue," he told reporters.