The UN’s nuclear chief on Tuesday said he was unconcerned by Russia's construction of a nuclear reactor in Iran, brushing aside US allegations that the facility could be used to develop nuclear weapons.

Washington has strongly criticised Russia for pushing ahead with construction of the $800 million reactor near the Iranian port of Bushehr, saying Tehran could use Moscow's atomic knowhow to develop nuclear weapons.

"Bushehr is not apparently at the centre of international concern because Bushehr is a project to produce nuclear energy," Muhammad al-Baradai, International Atomic Energy Agency (IAEA) chief, said after talks with Russian President Vladimir Putin.

"It's not something that is of any concern on our part," he told reporters at Putin's country residence outside Moscow. He said Bushehr was not mentioned in his hour-long talks with Putin and Russia's top atomic and security officials.

Washington, which says Iran is part of an "axis of evil" of states seeking weapons of mass destruction, has called on Russia to ditch the project. It also fears Iran would use Bushehr as a cover for the transfer of other sensitive nuclear technology.

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Iran says it has no atomic weapons plans. Moscow denies any suggestion that Tehran could make a bomb on the basis of the technology to operate the power station.

A Moscow source involved in the Bushehr project said al-Baradai's support was crucial at a time when Washington seemed to be stepping up criticism of Iran's nuclear programme.

"He publicly threw his weight behind Russia, and that's really important for us to keep the project rolling," the source said.