VIENNA, Austria – The U.N. nuclear watchdog agency yesterday endorsed Iran’s agreement to suspend all uranium enrichment within a week, the key element of a deal worked out with European countries.

But the apparent victory for diplomacy falls short of American demands for a permanent suspension – or scrapping – of Iranian activities that Washington asserts are meant to make nuclear weapons. Iran insists it only wants to generate electricity.

The agreement, detailed in a report by the International Atomic Energy Agency, appeared to represent a breakthrough for the Europeans and to hurt an American push to have Iran hauled before the U.N. Security Council for allegedly violating the Nuclear Nonproliferation Treaty. The council could impose sanctions on Tehran.

The deal does not settle the enrichment issue and only buys Iran more time. The agreement commits Iran to suspend enrichment while it works out the details of an aid package with the Europeans or until negotiations collapse. American officials took a wait-and-see approach to the agreement. President Bush once labeled Iran part of an “axis of evil” with North Korea and prewar Iraq.

“We have seen a little bit of progress, hopefully, over the last 24 hours,” Secretary of State Powell said.

Some members of Congress were skeptical that the Iranians would honor any agreement. “We have to make certain that these pledges that the Iranians are making now are not the North Korean pledges of the 1990s. I think that’s a top issue for the next four years,” said Rep. Lincoln Diaz-Balart, a Republican of Florida, during a visit yesterday to The New York Sun.

State Department spokesman Richard Boucher said, “We all need to be a bit careful at this moment” since the administration had not seen the accord. And White House Press Secretary Scott McClellan said the administration will talk with Britain, France, and Germany, which negotiated the deal.

In return for the suspension, Europe has been suggesting it would help Iran develop peaceful nuclear energy.

European officials said the agreement could generate international confidence that Iran’s nuclear activities are peaceful. The British foreign secretary, Jack Straw, said the deal represents “a significant development in relations between Europe and Iran.”

But privately, European Union diplomats in Vienna and other European capitals acknowledged that the agreement achieved less than the ideal of permanent suspension.

The agreement, one diplomat said, was a beginning. The idea, she said, was to “engage Iran [and] negotiate a long-term agreement on suspension” beyond the present short-term commitment. She spoke on condition of anonymity.

In Tehran, Hasan Rowhani, Iran’s top nuclear negotiator, emphasized that the freeze was temporary.

“In the agreement, there is no talk of cessation but only voluntary suspension” of enrichment, he said after the report was released to diplomats accredited to the Vienna-based IAEA. “This is a preliminary agreement that will lead us to a final agreement between Iran and the Europeans.”