By Francois Murphy

VIENNA (Reuters) -The U.N. nuclear watchdog's 35-nation Board of Governors declared Iran in breach of its non-proliferation obligations on Thursday for the first time in almost 20 years, raising the prospect of reporting it to the U.N. Security Council.

The major step is the culmination of several festering stand-offs between the International Atomic Energy Agency and Iran that have arisen since President Donald Trump pulled the U.S. out of a nuclear deal between Tehran and major powers in 2018 during his first term, after which that deal unravelled.

Since Iran bristles at resolutions against it and this is the most significant one in years, it is likely to respond with a nuclear escalation, as it has said it will. That could complicate the current talks between Iran and the U.S. aimed at imposing new curbs on Iran's accelerating atomic activities.

The resolution also comes at a time of particularly heightened tension, with the U.S. pulling staff out of the Middle East, and Trump warning the region could become dangerous and saying Washington would not let Iran have nuclear weapons.

Diplomats at the closed-door meeting said the board passed the resolution submitted by the United States, Britain, France and Germany with 19 countries in favour, 11 abstentions and three states - Russia, China and Burkina Faso - against.

DAMNING REPORT

The text, seen by Reuters, declares Iran in breach of its obligations given a damning report the IAEA sent to member states on May 31.

"The Board of Governors... finds that Iran's many failures to uphold its obligations since 2019 to provide the Agency with full and timely cooperation regarding undeclared nuclear material and activities at multiple undeclared locations in Iran ... constitutes non-compliance with its obligations under its Safeguards Agreement with the Agency," the text said.

A central issue is Iran's failure to provide the IAEA with credible explanations of how uranium traces detected at undeclared sites in Iran came to be there despite the agency having investigated the issue for years.

The May 31 IAEA report, a board-mandated "comprehensive" account of developments, found three of the four locations "were part of an undeclared structured nuclear programme carried out by Iran until the early 2000s and that some activities used undeclared nuclear material".

U.S. intelligence services and the IAEA have long believed Iran had a secret, coordinated nuclear weapons programme it halted in 2003, though isolated experiments continued for several years. IAEA Director General Rafael Grossi said this week the findings were broadly consistent with that.

Iran denies ever having pursued nuclear weapons.

While the resolution alluded to reporting Iran to the U.N. Security Council, diplomats said it would take a second resolution to send it there, as happened the last time it was declared in non-compliance in September 2005, followed by referral in February 2006.

(Reporting by Francois Murphy; Editing by Ed Osmond)