Reuters: European Union foreign ministers will debate on Friday what to do about Iran’s defiance of a U.N. deadline to stop sensitive nuclear work and how to use the aftermath of the Lebanon war to promote Middle East peace.

New York Times: The global nuclear monitoring agency deepened suspicions on Thursday about Iran’s nuclear program, reporting that inspectors had discovered new traces of highly enriched uranium at an Iranian facility.

VIENNA (Reuters) – The U.N. nuclear agency declared Iran had failed to halt nuclear work by a Thursday deadline, in a confidential report leaked to Reuters.

Reuters: President George W. Bush said on Thursday Iran must face consequences for failing to meet the August 31 deadline for halting sensitive nuclear work.

Reuters: European foreign policy chief Javier Solana and Iran’s chief nuclear negotiator, Ali Larijani, agreed on Thursday to meet soon to discuss Iran’s response to incentives to curb its nuclear activities, Solana’s spokeswoman said.

AFP: The under-secretary of Iran’s Supreme National Security Council Mohammad Nahavandian on Thursday said his country was ready to cooperate on its nuclear programme, but argued that talks should focus on content rather than deadlines.

AFP: German Chancellor Angela Merkel said Thursday she would deeply regret a decision by Iran to ignore a UN deadline to stop uranium enrichment but still sought talks with the Islamic republic.

AFP: UN chief Kofi Annan said on Thursday that efforts were being made to arrange a meeting between Iran and the five permament members of the Security Council plus Germany over Tehran’s controversial nuclear programme.

New York Times: With Iran defying a Thursday deadline to halt production of nuclear fuel, the United States and three European allies are assembling a list of sanctions they would seek in the United Nations Security Council, beginning with restrictions on imports of nuclear-related equipment and material.