"While Iran seeks to create the perception of advancement of its nuclear program, real progress has been more modest," said William Burns, the top official handling Iranian issues at the State Department.

The UN Security Council has imposed several rounds of sanctions on Iran for not suspending its uranium enrichment activities, which world powers fear could be used to make a nuclear weapon.

Washington has been in the forefront of diplomatic efforts to impose the sanctions and lawmakers attending Congressional hearings in which Burns testified Wednesday persistently raised concerns about Iran's nuclear threat.

But Burns, under secretary of state for political affairs, said Iran had not yet mastered uranium enrichment efforts, thanks to UN sanctions.

"It is apparent that Iran has not yet perfected enrichment, and as a direct result of UN sanctions, Iran's ability to procure technology or items of significance to its missile programs, even dual use items, is being impaired," he told the hearing on the "strategic challenge posed by Iran."

In addition to limiting Iran's access to proliferation sensitive technologies and products, Burns said key officials involved in Iran's procurement activities had been "cut off" from the international financial system and restricted from travel.

Iran's banks were also being pushed out of their normal spheres of operation, he said.

Amid international concerns after Iran test-fired a long range missile it said was capable of reaching key US ally Israel, Burns asked the Islamic republic to seriously reconsider its "provocative" policies and move towards a "cooperative and constructive" path.

"Until that time, however, the US and the international community remain committed to meeting the challenges posed by Iran," he said.

Iran's missile test firing Wednesday angered the United States amid growing fears that the nuclear standoff could lead to war.

The missile launch is "very disturbing, provocative and reckless," Burns said at a hearing of the Senate foreign relations committee.

Lawmakers meanwhile warned the administration of President George W. Bush over the need to step up diplomatic efforts to end Iran's defiant nuclear drive.

"Iran daily inches closer to the point where it can produce enough weapons-grade uranium to make a nuclear bomb," said Howard Berman, the chairman of the House of Representatives foreign affairs panel.

"No one knows precisely when that will happen, but most experts say it will be soon," he said. "Some predict as early as the end of this year."

Senate foreign affairs panel chairman Joseph Biden called on the Bush administration to hold direct talks with Iran similar to those with North Korea that led to commitments to end the hardline communist state's nuclear weapons drive.

Iran insists its nuclear activities are aimed solely at generating energy but the West fears could be aimed at making an atomic bomb.

The United States has never ruled out military action against Iranian atomic facilities.

Burns said Washington would pursue "tough minded diplomacy, maximizing pressure on the Iranians at multiple points to drive home the costs of continued defiance of the rest of the world, especially on the nuclear issue."

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