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A confidential U.N. report says that the Iranian regime is pursuing development of ballistic, posing an acute challenge to six powers negotiating with Tehran to rein in its nuclear program, Reuters reported.

The Iranian regime insists that missiles should not be part of the nuclear talks, but a senior U.S. official made clear this week that Tehran's ballistic capabilities must be addressed in the negotiations since U.N. Security Council resolutions on Iran "among many other things, do say that any missile capable of delivering a nuclear weapon must be dealt with."

The new report by the U.N. Panel of Experts, seen by Reuters "makes clear that, apart from holding off on test-firing one type of rocket, Iran shows no sign of putting the brakes on the expansion of its missile program."

"Iran is continuing development of its ballistic missile and space programs," the experts said, citing the August 2013 identification of a new missile launch site near Shahrud and a larger missile and satellite launch complex at the Imam Khomeini Space Center at Semnan believed to be near completion.

The dispute over missiles has already surfaced behind closed doors in Vienna. On Wednesday, the first day of the latest round of the nuclear talks, the U.S. delegation made clear that it wanted to discuss both Iran's ballistic missile program and possible military dimensions of its past nuclear research.

During a visit to an IRGC Aerospace Force exhibition on May 11, the regime's Supreme Leader Ali Khamenei praised missile production as 'a message of innate power and capability'.

He added:"They (the West) expect us to limit the missile program. This is while they constantly issue military threats against Iran. Therefore, such an expectation is stupid and foolish."

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