Iran has not been living up to its obligations under an interim nuclear deal, according to a new report, creating a potential nightmare for the Obama administration as it seeks to lock down a final agreement.

The confidential International Atomic Energy Agency report dated Wednesday said Iran had begun, but not completed, converting more than four tons of enriched uranium into less-dangerous uranium oxide, a process that was supposed to have been completed by June 30.

RELATED: 5 ways Obama has caved to Iran

Administration officials have pushed back fiercely against the suggestion that Iran was cheating on the interim deal since the problem was first brought to light in a June 1 New York Times report. But independent experts say Iran's failure — and the apparent lowering of standards by the United States to cover for it — poses a serious problem for ongoing talks in Vienna, where the question of how to verify compliance has become the major sticking point holding up an agreement.

Meanwhile, any sign that Iran can't or won't comply with the terms of a deal is bound to cause problems for President Obama in Congress, which will have a chance to review an agreement before it takes effect. The House Foreign Affairs Committee has already scheduled a July 9 hearing to examine whether any deal meets the standards set by the administration: to ensure Iran cannot use its nuclear program to develop a weapon.

RELATED: Concessions could sink Iran nuclear deal for Democrats

"When it became clear that Iran could not meet its commitment to convert the [low-enriched uranium] into uranium dioxide, the United States revised its criteria for Iran meeting its obligations. In this case, the potential violation refers to Iran not producing the enriched uranium dioxide by the end of the initial six-month period of the [interim agreement] and again after its first and second extensions," the Institute for Science and International Security wrote Wednesday in an analysis of the IAEA report.

"The choosing of a weaker condition that must be met is not a good precedent for interpreting more important provisions in a final deal."

The analysis, authored by David Albright, founder of the nonpartisan organization, along with Serena Kelleher-Vergantini and Andrea Stricker, also notes that by accepting an unproven technical process for getting rid of excess enriched uranium, the United States raised questions about whether the final deal could ensure Iran's compliance because the amounts would be much larger.

According to the IAEA report, Iran had converted only 9 percent of the enriched uranium it was required to convert, with the rest remaining in an intermediate form of uranium oxide, which U.S. officials told reporters would be even more difficult to reconvert into enriched uranium.

It was the latest in a month-long defense of Iran's position by the Obama administration since the Times story appeared.

"Our purpose in defending what's happening here is solely to make people understand that the [interim agreement], which we negotiated, is being upheld and is, currently everyone's in compliance," State Department spokeswoman Marie Harf said June 5 after four days of questioning on the topic.

But the interim deal didn't require that Iran simply turn low-enriched uranium into a substance that was difficult to reconvert," Blaise Misztal, director of the Bipartisan Policy Center's national security program, wrote Thursday.

"It was specifically spelled out that Iran was required to turn [low-enriched uranium] into [uranium oxide]. Failure to do so is, strictly interpreted, failure to comply with the [interim agreement]," he said.

"And failure to comply with the [interim agreement] is crucial because it signals what Iran's behavior is likely to be under a comprehensive deal, if one can be cobbled together in the next couple of days: attempting to find loopholes and wiggle room it can exploit to cheat on its obligations," he added.

The issue of verification has dogged the talks after an apparent hardening of Iran's position since negotiators agreed April 2 on a framework for a final deal. In a June 23 speech, Ayatollah Ali Khamenei, Iran's supreme leader, insisted that international inspectors could not have access to military sites. Meanwhile, Iran has yet to fully cooperate with the IAEA's requests for information on past nuclear work.

IAEA chief Yukiya Amano met Thursday with Iranian President Hassan Rouhani in a bid to resolve those questions.

Arms control experts agree that it would be impossible to verify that Iran's nuclear program is peaceful if an agreement limits access to international inspectors, or lets Iran get away without a full accounting of past work.

Iran and six world powers have until July 7 to work out a deal. Obama must submit the deal to Congress by July 9 in order to give lawmakers only 30 days to consider it. If he submits it later, Congress has 60 days, giving opponents longer to find problems.