Iran atomic drive slows, more clarity needed-IAEA

VIENNA, Aug 30 (Reuters) Iran's uranium enrichment programme is operating well below capacity and is far from producing nuclear fuel in significant amounts, according to a confidential UN nuclear watchdog report obtained by Reuters.

A senior Iranian nuclear official said the report showed Western suspicions that Iran was trying to build a nuclear bomb were baseless.

Iran struck a transparency deal with the International Atomic Energy Agency on August. 21 to answer questions about the nature of its programme which Iran says is aimed purely at electricity production.

''The work plan is a significant step forward,'' said the IAEA safeguards report, but it stressed resolving current issues was not enough to give Iran's nuclear work a clean bill of health.

As long as Iran refused to allow wider-ranging inspections of sites not declared to be nuclear, the agency would be unable to verify Iran did not have a secret military nuclear facility.

''Iran would need to continue to build confidence about the scope and nature of its present and future nuclear programme,'' the report said.

However, the report's detail on Iranian cooperation with the IAEA, and Tehran's lack of significant enrichment progress, may well blunt Washington's push for painful sanctions over Iran's repeated refusal to suspend enrichmEnt work.

The United Nations has imposed two sets of sanctions on Tehran since December.

Western concern about Iranian intentions grew in April when Tehran proclaimed ''industrial'' enrichment capacity, a level starting with 3,000 centrifuges running at supersonic speed.

The IAEA report said Tehran remained well short of that threshold. Iran had just under 2,000 centrifuges divided into 12 cascades, or interlinked units, of 164 machines each refining uranium at its underground Natanz plant as of Aug. 19, it said.

SLOWDOWN AFTER FAST START ''Iran made a fast start but then there was a levelling-off,'' said a senior U.N. official versed in the IAEA's findings. ''We don't know the reasons, but the slow pace continues. The rate of feeding (uranium into centrifuges) is well below capacity.'' Iran uses a 1970s vintage of centrifuge prone to breakdown if spun at high speed for long periods but is researching a more advanced, durable model at sites off limits to inspectors.

Gregory Schulte, US envoy to the IAEA, said the fact Iran had increased the number of cascades running by 50 per cent since May, from eight to 12, was of concern to Security Council members, ahead of talks about tougher sanctions against Tehran.

''Iran is mistaken if it thinks it can substitute offering cooperation on outstanding issues as an alternative to full suspension of enrichment activities,'' a European diplomat said.

The report detailed how IAEA sleuths had clarified one issue on the plan's list -- small experiments with plutonium kept secret in violation of Iran's non-proliferation commitments.

Western diplomats fear Iran scored a victory in its deal with the IAEA by allowing it to answer questions one by one, prolonging the process and foiling more punitive UN action.

Russia, a Security Council veto-holder which does not think Iran poses an imminent threat to world peace, opposes more sanctions while Tehran's rapprochement with the IAEA moves on.

IAEA safeguards director Olli Heinonen deflected concern among Western diplomats that the transparency plan would not require Iran to furnish adequate proof for its answers.

''Iran is now facing a litmus test to provide answers in a timely manner to our questions. It's important that Iran provides access to documentation, persons, and equipment to help us verify the answers,'' he told reporters today.

REUTERS MS PM2320