Iran's ambassador to the IAEA, Ali Akbar Salihi, explained the find by the international watchdog at the Kalaye Electric Company near Tehran, on national television on Sunday.

The US has charged Iran with using Kalaye to test centrifuges, integral components in the enrichment of uranium, which can then be used to build atomic bombs.

The admission comes after Iran's foreign minister said his country was willing to cooperate with the UN's nuclear agency, though it would continue with its nuclear power programme.

Co-operation

“We are trying and we are determined to cooperate (with the International Atomic Energy Agency),” Kamal Kharazi told ABC television.

“The problem is that the US administration asked us to stop enrichment activities in Iran. While it is legal ... and nothing is wrong as long as it is under the auspices of the IAEA and the inspection regime,” he said.
 
Kharazi also said Iran was ready to sign a new protocol with the IAEA to ease US concerns.

“If we sign the additional protocol, we want to make sure that we can continue with enrichment facilities to produce fuel needed for our power plants,” he added.

Answers needed
 
US Secretary of State Colin Powell told ABC that Iran's signing the protocol “in and of itself isn't enough.” “We have to have all questions with respect to their nuclear weapons programmes answered,” he said.

"Over the past year, the evidence...has made it clear to the world that there is something going on in Iran with respect to nuclear weapons development that goes beyond their nuclear power industry"

US Secretary of State Colin Powell

“Over the past year, the evidence that has come forward, that is now before the IAEA, has made it clear to the world that there is something going on in Iran with respect to nuclear weapons development that goes beyond their nuclear power industry,” he added.

The IAEA has given Iran until 31 October to disprove US allegations it is trying to develop nuclear warheads.

US President George Bush has called on Tehran to be forthcoming with information on its nuclear programmes and said “it is in our national interests to make sure that Iran does not develop a nuclear weapon.”

The Iranians claim their nuclear programme is peaceful. Traces of highly enriched uranium found earlier this year at a factory used to make nuclear fuel were also contaminated by second-hand components, the Iranian government claimed.