News reports of the compromise spawned headlines in U.S. newspapers that the Bush administration has softened its stand on Iran's nuclear program to appease European allies.

But in Congressional testimony Wednesday, Mr. Powell said the United States had not shifted its position "in the slightest" and continues to hold that Iran should give up all "ambitions and capabilities" to develop a nuclear weapon.

The Secretary told a House Appropriations subcommittee that negotiations over the wording of the key resolution were to be expected, but that he believes the United States obtained a good compromise that protects its interests while reflecting the views of European colleagues.

He said the key to the measure is the implicit threat that a lack of cooperation by Iran with the IAEA will mean a referral to the U.N. Security Council by IAEA board, at its next meeting in June.

"What we have insisted is that there has to be language in this resolution that causes the IAEA to review the situation at their next meeting, and then in June make a judgment as to whether further action should be required and whether there should be other referrals to the Security Council. And that language, I'm confident, I hope, I'm confident - I'm not only hopeful, but confident -- will be reflected in the resolution. But in the writing of these resolutions there are always compromises taking place, there are always discussions taking place," he said.

The draft resolution, to be voted on by the 35 nation board later this week, criticizes Iran for not fully living up to a pledge to be completely open about its nuclear activities, and cites its failure to resolve all questions about uranium enrichment activities.

But it also praises the Tehran government for signing an agreement for snap inspections of its nuclear facilities and other cooperation with the IAEA.

Officials here say the measure balances the U.S. conviction that Iran has a secret nuclear weapons program with the Western European view that more can be done through "constructive engagement" with Iran to clear up questions about its nuclear activities.

Mr. Powell told the Congressional panel that U.S. firmness on the issue caused Russia to take a "hard look" at its nuclear cooperation with Iran, prompted the European Union to get involved, and caused the IAEA to discover omissions in Iranian reporting to the U.N. agency.

He said international pressure is pushing Iran, however reluctantly, in the direction of accounting for its nuclear activities.

He said the United States is not satisfied with what has been achieved thus far, but said the Iranians "are no longer walking around with the free hand" on the issue that he said they had a year ago.