Iran says report shows US charges are baseless

TEHRAN, Aug 31 (Reuters) Iran is not fully satisfied with a report by the UN watchdog on its nuclear programme but the International Atomic Energy Agency has shown US accusations about its plans are baseless, an Iranian official said today.

An IAEA report said Iran had failed to stop uranium enrichment by today's deadline set by the UN Security Council, which will meet to discuss possible sanctions.

''Generally, although this report has not fully satisfied us, it shows that America's propaganda and politically motivated claims over Iran's nuclear programme are baseless and based on American officials' hallucinations,'' deputy head of Iran's Atomic Energy Organisation, Mohammad Saeedi, told the official news agency IRNA.

The confidential report by the Vienna-based body, leaked to Reuters, said Iran had resumed enriching small amounts of uranium in recent days. The agency said lack of Iranian cooperation had blocked its probes.

Saeedi told Reuters: ''In one part of the report, it says that Iran, at one stage because of some legal ambiguities in the safeguards (agreement), had set some limitations but then it provided the IAEA with full access.'' He said Iran's nuclear case, which was referred to the UN Security Council, could be solved by the IAEA.

''This report shows Iran has logical interaction with the agency based on the safeguards and it shows Iran's nuclear issue can be resolved in the framework of the agency,'' he said.

He said Iran would press ahead with its nuclear work, which the West says is designed to build bombs but which Tehran insists is simply to generate electricity.

''We will go ahead based on the schedule that we have announced to the IAEA,'' he said. ''This report carries no sign Iran's nuclear programme is not peaceful.'' Reuters SRS VP0130