The United Nations atomic agency has found evidence at an underground bunker in Iran that could mean the country has moved closer to producing the uranium threshold needed to arm nuclear missiles, diplomats have said.
The International Atomic Energy Agency has found traces of uranium enriched up to 27 per cent at the Fordow enrichment plant in central Iran, the diplomats told the Associated Press on Friday.
That is still substantially below the 90 per cent level needed to make the fissile core of nuclear arms.
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But it is above Iran's highest-known enrichment grade, which is close to 20 per cent, and which already can be turned into weapons-grade material much more quickly than the Islamic Republic's main stockpile, which can only be used for fuel at around 3.5 per cent.
The diplomats, who demanded anonymity because their information is privileged, said the find did not necessarily mean that Iran was covertly raising its enrichment threshold toward weapons-grade level.
They said the centrifuges that produce enriched uranium could have over-enriched at the start as technicians adjusted their output, an assessment shared by nonproliferation expert David Albright.
Albright, whose Washington-based Institute for Science and International Security looks for signs of proliferation, said a new configuration at Fordow means its tends to "overshoot 20 per cent" at the start.
"Nonetheless, embarrassing for Iran," he wrote in an email to the AP.
Calls to Ali Asghar Soltanieh, Iran's chief delegate to the IAEA, were rejected and the switchboard at the Iranian mission said he was not available.
IAEA media officials also said the agency had no comment on the latest report.
Iran is under several rounds of UN sanctions for its failure to disclose information on its controversial nuclear programme.
Tehran says it is enriching uranium to provide more nuclear energy for its growing population, while the US and other nations fear that Iran doing that to have the ability to make nuclear weapons.
The latest attempts to persuade Iran to compromise and let UN experts view its nuclear programme ended inconclusively on Wednesday at a meeting in Baghdad.
At the talks, six nations - the US, Russia, China, Britain, France and Germany - failed to persuade Tehran to freeze its 20 per cent enrichment. Envoys said the group will meet again next month in Moscow.
Iran started enriching uranium to 20 per cent last year, mostly at Fordow, saying it needed the material to fuel a research reactor and for medical purposes.
Still, its long-standing refusal to stop enrichment and accept reactor fuel from abroad has sparked fears it wants to expand its domestic programme to be able to turn it toward making weapons.
Those concerns have increased since it started higher enrichment at Fordow, which is carved into a mountain to make it impervious to attack from Israel or the United States, which have not ruled out using force as a last option if diplomacy fails to curb the Islamic Republic's nuclear programme.
Iran went into Wednesday's talks urging the West to scale back on recently toughened sanctions, which have targeted Iran's critical oil exports and have effectively blackballed the country from international banking networks.
The 27-nation European Union is set to ban all Iranian fuel imports on July 1, shutting the door on about 18 per cent of Iran's market.
Saeed Jalili, Iran's top nuclear negotiator, offered a lukewarm assessment of Wednesday's negotiations, in light of European and American refusal to lift tough sanctions against Iran as Tehran had hoped.
"The result of the talks was that we were able to get more familiar with the views of each other," Jalili told reporters.
In Washington, Secretary of State Hillary Rodham Clinton said significant differences remain between the two sides and that it's now up to Iran "to close the gaps".
"Iran now has the choice to make: Will it meet its international obligations and give the world confidence about its intentions or not?" Clinton said.
The diplomats who spoke to the AP said a confidential IAEA report on Iran's nuclear programme to be released later on Friday to the agency's 35-nation board will mention of the traces of 27 per cent enrichment found at Fordow.
The report is also expected to detail the state of talks between the UN nuclear agency and Iran that the agency hopes will re-launch a long-stalled probe into suspicions that Tehran has worked on nuclear-weapons related experiments.