Iran, though, insists it wants a uranium enrichment industry solely to provide an alternative source of electricity.

Commenting on the IAEA report, the Washington-based Institute for Science and International Security said that at the present pace of production of enriched uranium, Tehran could make two nuclear weapons within eight months.

The report said inspectors have told Iran that the growing pace of enrichment is causing the agency to review its inspection routine so that it can maintain oversight of the process.

Without co-operation by the Islamic Republic, the IAEA "will not be in a position to provide credible assurance about the absence of undeclared nuclear material and activities in Iran," the report said.

Uranium traces

In a separate report, also obtained by the media on Friday, the IAEA said it had found traces of uranium in environmental samples taken last year of a small research reactor in Damascus.

It was not the type of uranium that would normally be expected to be found at this kind of reactor, a senior official close to the IAEA said on condition of anonymity.

The IAEA has been investigating allegations of illicit nuclear work by Syria since last year.

US intelligence reports have said that Syria had almost built a reactor meant to yield plutonium for atom bomb fuel before Israel bombed it to rubble in 2007.

The IAEA has said that the building bore some of the characteristics of a nuclear facility and UN inspectors had also detected "significant" traces of man-made uranium at the site, though unexplained by Damascus.

The 35-nation board of the IAEA were scheduled to meet on June 15 to discuss the reports on Syria and Iran.