Days ahead of scheduled talks between Iran and the major world powers, the United States moves to make more threats against Iran's nuclear program.

US Secretary of State Hillary Clinton warned on Friday that Iran would face isolation and economic pressure should it continue to defy its nuclear activities.

"There will be accompanying costs for Iran's continued defiance: more isolation and economic pressure, less possibility of progress for the people of Iran," Clinton said.

"We have made clear our desire to resolve issues with Iran diplomatically. Iran must now decide whether to join us in this effort," she added.

After Iran presented its new package of proposals to the five permanent members of the UN Security Council -- Russia, China, Britain, France and the US -- plus Germany (P5+1), Tehran and the six major powers agreed on October 1 as the date to hold wide-ranging talks addressing global issues along with Tehran's much-debated nuclear program.

Iran faces pressure to halt its nuclear enrichment, as Western countries, spearheaded by the US and Israel, claim its program is aimed at building a nuclear bomb.

Tehran, however, has denied seeking nuclear weapons and has called for the removal of all weapons of mass destruction from across the globe.

As Iran and the West are preparing for the October meeting, CIA Director Leon Panetta claimed that Iran is acquiring nuclear knowledge and capability adding that Iranian officials have different views whether to actually build a bomb or not.

"Our view is and our intelligence is that while they are proceeding to develop a nuclear capability in terms of power and low-grade uranium, that there is still very much a debate going on within Iran as to whether or not they ought to proceed further," Panetta told VOA in an exclusive interview.

"To some extent that provides an opening, hopefully, to try to influence the future direction of Iran," he added.

On Thursday, the International Atomic Energy Agency refuted claims by the Associated Press that it had obtained a report, showing that experts at the IAEA were in agreement that Tehran had the ability to make a "nuclear bomb" and was on its way to developing a missile system capable of carrying an "atomic warhead."

The UN nuclear watchdog declared in a statement that it had no proof that Iran has, or once had, a covert atomic bomb program, reaffirming that the allegations claiming that the agency was sitting on undeniable evidence that Iran has been pursuing a military nuclear program were "politically motivated and baseless."