(Updates throughout with Iranian ambassador)

By Claudia Parsons

UNITED NATIONS, Oct 29 (Reuters) - The head of the U.N. nuclear watchdog urged Iran on Monday to demonstrate "active cooperation and transparency" in its dealings with his agency so as to convince the world its nuclear ambitions are peaceful.

Washington slapped new sanctions on Iran last week and recent months have seen increasingly belligerent rhetoric that has prompted speculation of possible U.S. military action.

Iran's ambassador warned that U.S. unilateral measures risked undermining its cooperation with the atomic agency.

A top U.S. diplomat said there was no sign Iran was going to suspend uranium enrichment and Washington was pushing ahead with drafting a new U.N. resolution on sanctions for late November to increase the pressure on Tehran.

In a speech to the U.N. General Assembly in New York, Mohamed ElBaradei, the chief of the International Atomic Energy Agency, said it was regrettable that Iran had not suspended uranium enrichment and was continuing to build a heavy water reactor at Arak, contrary to Security Council decisions.

He said, "The agency so far has been unable to verify certain important aspects relevant to the scope and nature of Iran's nuclear program" but that Iran had at least reached an agreement with the IAEA in August to address the issues.

SUSPICIONS IN WASHINGTON

Washington and other Western countries suspect Tehran is developing nuclear weapons, a charge that Iran has denied. The IAEA deal has also been criticized by some as allowing Iran to play for time while not suspending enrichment of uranium.

ElBaradei said Iran's agreement in August on a work plan with a defined timeline for addressing the various issues was "an important step in the right direction."

"Naturally, Iran's active cooperation and transparency are key in this regard," he said, adding that "credible assurance" by the IAEA of the peaceful nature of Iran's nuclear program would "go a long way towards building confidence."

ElBaradei has said Iran was years away from having the ability to produce nuclear weapons and that there was still no evidence Tehran was building a bomb.

Iranian Ambassador Mohammad Khazaee reiterated Tehran's repeated denials that it seeks nuclear weapons.

"There is no doubt that the recent U.S. unilateral measures against Iran would only seek to undermine the current negotiations and cooperation between Iran and the Agency," Khazaee said in his speech to the General Assembly.

U.S. Ambassador Zalmay Khalilzad said Washington was working on a three-track approach to Iran -- the first involving ElBaradei's workplan and the second involving talks focused on suspension of enrichment activity.

"Track three is the drafting of a new resolution to increase the pressure on Iran, to incentivize Iran to cooperate, should they not cooperate with one or both of the other tracks," Khalilzad said. He said Western powers were working toward a U.N. resolution toward the end of November.

Despite talks with an EU mediator last week, Khalilzad said there was no indication Iran would suspend uranium enrichment.

On Sunday, ElBaradei urged Iran's critics to "stop spinning and hyping the Iranian issue." Asked about the comment, U.S. State Department spokesman Sean McCormack said, "I think we can handle the diplomacy on this one." (Additional reporting by Arshad Mohammed in Washington)

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