Iran defies deadline to halt atom work: U.N. watchdog

The International Atomic Energy Agency said in a report Iran had installed two cascades, or networks, of 164 centrifuges in its underground Natanz enrichment plant with another two cascades close to completion.

This represented efforts to expand research-level enrichment of nuclear fuel into "industrial scale" production.

It said Iranian workers lowered into the plant an 8.7-ton container of uranium hexafluoride gas (UF-6) to prepare to start feeding centrifuges, which can enrich the material into fuel for power plants or, if refined to high levels, for bombs.

Iran's defiance of a 60-day deadline set by the Council when it banned nuclear technology transfers to Iran on December 23 will expose Iran to wider sanctions over its atomic energy program, which the West fears is a front for assembling atom bombs.

Tehran says it is seeking nuclear-generated electricity.

"Iran has not suspended its enrichment-related activities," said the confidential IAEA report, obtained by Reuters.

"Iran has continued with the operation of the (small ground-level pilot fuel-enrichment) plant," it added.

"It has also continued with the construction of the (underground) Fuel Enrichment Plant, including installation of cascades, and has transferred UF-6 to the plant," it said.

"As of (February 17), no UF6 had been fed into the process at the (underground plant)," the report added.

The report said Iran had said it intended to have 3,000 centrifuges, divided into 18 cascades, installed and brought "gradually into operation" by May this year.

The 3,000 centrifuge machines will lay the basis for "industrial-scale" fuel production involving some 54,000.

The six-page report said Iran had agreed to interim IAEA verification procedures at the underground plant but not to remote monitoring.

The IAEA had told Iran this restriction would violate non-proliferation safeguard rules once more than 500 centrifuges were installed, according to the report.

It said Iran had declared that it had refined 66 kg of UF-6 gas at the small experimental wing of Natanz to levels below 5 percent, the general ceiling for fuel suitable to be used for nuclear energy plants.

The 66 kg was a minute amount of the feed material, a senior U.N. official familiar with IAEA operations in Iran said. Around 10 tonnes of the UF6 feedstock would be needed to yield enough enriched uranium to start running a power plant.

The report said samples taken by IAEA inspectors verified enrichment levels of 4.2 percent at the pilot facility.

Analysts say Iran has struggled to operate its two cascades in the pilot plant for longer periods of time without breakdown, the key to producing volumes of enriched uranium sufficient for plant or bomb fuel.

Given quality-control problems and inexperience, Iran probably remains three to 10 years away from accumulating enough high-enriched uranium for the core of atom bombs -- assuming it wants them, intelligence estimates and independent analysts say.

The report provided no significant answers to long outstanding IAEA questions about the nature of Iran's program, such as mysterious traces of bomb-grade uranium and alleged military involvement in enrichment research.

Iran has repeatedly promised to clear up such issues. But diplomats say it is withholding answers as bargaining chips for any future settlement with world powers on the Security Council, whom it accuses of illegal bullying over its nuclear project. Reuters