Ghana's UN Ambassador Nana Effah-Apenteng, the council president for August, told reporters that, "most likely nothing will happen tomorrow".
It comes as diplomats revealed to Agence France Presse (AFP) that Iran has started a new round of enriching uranium.
"They put in small quantities of (feedstock) uranium hexafluoride (UF6) gas last week," into a cascade line of 164 centrifuges in Natanz which enrich uranium, a diplomat close to the UN-watchdog International Atomic Energy Agency (IAEA) said Wednesday.
A second diplomat, who like the first asked not to be named, said the Iranians were doing this "to underscore the point that they are not going to stop enrichment-related activities."
Iran 'won't back down'
Later, Iranian President Mahmoud Ahmadinejad vowed Iran would not back down an "inch" in the face of intimidation.
"Iran will not back down an inch in the face of intimidation, aggression and will not accept being deprived of its rights," President Ahmadinejad said in a speech broadcast live on state television.
"The powers of oppression do not want Iran to progress. But I say to them: The Iranian people, including young scientists who have succeeded with empty hands and without your help to reach the summits of nuclear technology, can also develop Iran.
"The problem is that American leaders think they can solve all the problems by using force and their arsenal. But times have changed and we are in an epoch of culture, thought and logic, and it is because of this that they refuse to have a debate with us.”
US, allies 'mulling sanctions'
Meanwhile the New York Times has reported that the US and three European allies are considering a three-tier system of sanctions against Iran if it fails to comply with UN demands that it stop its uranium enrichment activity.
The list would begin with low-impact measures including an embargo on the sale of nuclear-related materials, a freeze of overseas assets and a travel ban for Iranian officials involved in the nuclear program, said officials involved with the talks.
If that failed to persuade Iran, the measures a few weeks later would progress to a broader travel ban and freezing assets of Iranian government members, a senior US official told the daily who requested anonymity, as did the other sources.
Should Iran continue to resist compliance, the sanctions would be ratcheted up to include restrictions on commercial flights and on World Bank loans to Tehran, the official added.
The newspaper said the US was discussing the proposed sanctions with Britain, France and Germany.
Talks on sanctions
According to the US State Department, major powers will meet in Europe early next week to discuss imposing sanctions against Iran if Tehran fails to meet the Thursday’s UN deadline.
But department spokesman Sean McCormack said the discussions could last some time before sanctions are actually imposed.
He indicated that this meant Iran had additional time beyond Thursday to abandon its nuclear program.
Later, US Undersecretary of State, Nicholas Burns, predicted confidently that the UN Security Council would impose sanctions on Iran within a month.
"I think it's abundantly clear that Iran has no intention of meeting the deadline and meeting the condition that the countries put down three months ago," Mr Burns said on CNN.
"We believe the sanctions regime will be agreed to in September by the Security Council and we're going to work towards that with a great deal of energy and termination. There has to be an international answer and we believe there will be one.”
Mr McCormack said Mr Burns was expected to meet officials from Britain, China, France, Germany and Russia early next week for the first "formal meeting" on sanctions.
Mr McCormack did not say exactly when or where the Europe meeting would take place.
Talks on specific language for a United Nations resolution imposing the sanctions will also take place at UN headquarters in New York.
Incentives offered
The five permanent members of the council Britain, China, France, Russia and the United States plus Germany have sought to coax Tehran into suspending enrichment by offering a package of security, trade and technology incentives.
But Iran has made clear that it intends to pursue uranium enrichment which it began earlier this year. Enrichment makes fuel for nuclear power reactors but can also produce the raw material for atom bombs.
Russia and China, which both have extensive economic relations with Iran, have expressed strong reservations about imposing sanctions and negotiations over the issue are likely to be heated.
Iran's heavily oil-dependent economy has endured wide-ranging sanctions ever since the 1979 Islamic revolution and economists doubt whether new penalties would strangle its activity.
But as one of the world's major oil producers, Iran could retaliate by cutting its petroleum exports. World crude oil futures rose Wednesday amid jitters over the looming crisis.