UNITED NATIONS (CNN) -- Chief U.N. weapons inspectors told the Security Council on Monday that Iraq was still resisting international efforts to ensure it disarms, but inspectors should have more time to complete their work.

"Iraq appears not to have come to a genuine acceptance, not even today, of the disarmament which was demanded of it and which it needs to carry out to win the confidence of the world and to live in peace," said chief U.N. weapons inspector Hans Blix.

Blix and Mohamed ElBaradei, director general of the International Atomic Energy Agency, gave a 60-day progress report on Iraq's compliance with U.N. resolution 1441, which orders Baghdad to disclose all weapons of mass destruction and related materials.

Blix said Iraq has failed to account for large quantities of VX poison gas and anthrax it claims to have destroyed. He said there is "strong evidence" that Iraq maintained quantities of anthrax after it claimed to have destroyed its stocks.

Blix said the discovery of empty rocket artillery shells capable of carrying chemical weapons shows "that Iraq needs to make more effort to ensure that its declaration is currently accurate."

Although Iraq has "cooperated rather well" in granting inspectors access to all sites they wanted to visit, including private residences, Blix said, "It is not enough to open doors."

"Inspection is not a game of catch as catch can. Rather, it is a process of verification for the purpose of building confidence."

ElBaradei said his inspectors had been unable to verify whether Iraq has an active nuclear weapons program. But he urged Security Council members to let the inspection process "run its natural course."

"Barring exceptional circumstances and provided there is the sustained, proactive cooperation by Iraq, we should be able in the next few months to provide credible assurance that Iraq has no nuclear weapons program," ElBaradei said.

"These few months, in my view, would be a valuable investment in peace because they could help us avoid a war."

U.N. Secretary General Kofi Annan said Monday that inspectors "do need time to get the work done," although they shouldn't have "forever."

"I really hope that Iraq will comply, and we will be able to get on and disarm Iraq peacefully," he told reporters outside U.N. headquarters. "I have not given up on peace, and you shouldn't either."

U.N. inspectors have been searching for evidence of weapons of mass destruction since November. U.S. officials have said Iraq is in "material breach" of resolution 1441, and have repeatedly warned Iraq that time is running out.

U.S. Secretary of State Colin Powell reiterated Sunday that granting more time for U.N. inspectors to search Iraq for weapons of mass destruction would not prove fruitful without the cooperation of Iraqi leader Saddam Hussein. He added, "There is no indication whatsoever that Iraq has made the strategic decision to come clean and comply with its international obligation to disarm."

Iraq denies a connection to terrorism and says it has no weapons of mass destruction. Iraqi leaders insist the United States is looking for an excuse to launch a war to dominate the region and steal Iraqi oil.

"We have done everything possible to let this country and the whole region avoid the danger and the threat of war and destruction by the warmongers of Washington and their ally [British Prime Minister] Tony Blair," Iraqi Foreign Minister Naji Sabri said Monday.

U.S. drafting use-of-force resolution

The U.S. State Department has begun drafting a second resolution that would authorize military action to force Saddam's regime to disarm, CNN learned.

The resolution would be introduced only if the United States thinks it has the support of at least nine of 15 council members for a war. Under U.N. rules, there must be nine votes in favor of a resolution for it to pass.

There also cannot be any vetoes from any of the five permanent Security Council members.

The council's 15 member nations will hold closed-door discussions on the report Wednesday and will discuss the next step.

President Bush is expected to lay out his case against Iraq in his State of the Union address Tuesday. He will not call for war but will make it clear that the United States and its allies are prepared for military action, officials said.

Some members of the Security Council, among them Germany and France, have called for inspectors to be given more time.

Other nations appear to favor the United States' position.

European Union foreign ministers, in a written statement Monday, urged Iraq to "fully cooperate" with U.N. weapons inspectors and reaffirmed that their goal is "the effective and complete disarmament of Iraq's weapons of mass destruction."

The EU ministers also stressed their backing for U.N. resolution 1441, which, the statement said, gives ''an unambiguous message that the Iraqi government has a final opportunity to resolve the crisis peacefully.''

CNN correspondent Andrea Koppel contributed to this report.