World nuclear watchdog chief on Thursday urged Iran to stop building more centrifuges as a gesture for further negotiations, but warned against military action on Iran.

"I think it would be good ... if Iran today would stop building additional centrifuges. I think that could be a first step to the time-out," Mohamed ElBaradei, director-general of the International Atomic Energy Agency (IAEA), told reporters on the sidelined of a board meeting of the United Nations' nuclear watchdog.

An IAEA report two weeks ago said Iran continued to resist the UN Security Council ban on uranium enrichment and instead was expanding its activities.

"Now, it would, I think, help send a positive message if they stop building additional centrifuges," ElBaradei said, adding that there is no urgency for Iran to build nuclear capacity right now.

The Iranian nuclear issue topped the agenda of the meeting of the IAEA's 35-nation board of governors, which ended here on Thursday.

The meeting had been set to last till Friday, but was concluded ahead of schedule, apparently because there is no prospect of making progress either on the Iranian nuclear issue or on the agency's budget.

In his concluding remarks, ElBaradei spoke out against military action on Iran, an indirect warning to the United States and Israel.

Though the United States said on Wednesday the door to negotiation is still open for Iran, Washington has never ruled out the possibility of using force.

The use of force against Iran "would be catastrophic, would be an act of madness frankly," ElBaradei said.

"Let's talk about how to find a solution through diplomacy and through dialogue," he added.