VIENNA: Iran has installed about 1,000 advanced uranium enrichment centrifuges and is set to test them, a U.N. nuclear report showed, a development likely to worry Western capitals hoping for a change of course under the country's new president.
The International Atomic Energy Agency's quarterly report - the first since relative moderate Hassan Rouhani won Iran's June presidential election - also said the Islamic state had started making fuel assemblies for a reactor which the West fears could yield nuclear bomb material. Iran denies any such aim.
On the other hand, in what may provide relief for world powers seeking a peaceful settlement of the decade-old nuclear dispute with Iran, the planned commissioning of the Arak reactor itself has been delayed from early next year, the IAEA said.
In addition, Iran's most sensitive nuclear stockpile has grown little - remaining below its arch-enemy Israel's stated "red line" that could provoke military action - since the previous IAEA report in May. Iran's possible restraint here could buy time for more negotiations with six world powers.
Growth in Iran's reserve of uranium gas refined to 20 percent was held back as Iran stepped up conversion of the material into oxide to make fuel for a medical research reactor in Tehran. The stockpile of 186 kg compares with the 240-250 kg which experts say would be needed for a bomb if refined further.
The report still showed Iran pressing ahead with its nuclear programme at a time when the outside world is waiting to see if Rouhani will increase transparency and reduce confrontation in its foreign relations, as he has pledged.
However, envoys accredited to the IAEA had cautioned against reading too much into the latest inspectors' report as it mainly covered developments before Rouhani in early August, succeeding the conservative hardliner Mahmoud Ahmadinejad.
Iran says its nuclear energy programme is for electricity generation and medical uses only. It has rejected Western accusations that it is trying to develop the capability to produce nuclear bombs, despite having hidden sensitive activities from U.N. non-proliferation inspectors in the past.
Separately the IAEA announced a resumption on Sept. 27 of talks with Iran over how to get it to cooperate with an agency inquiry into "possible military dimensions" to its nuclear work. There have been 10 fruitless rounds of talks since early 2012, but the next session will be the first with Rouhani in office.
Obtained by Reuters on Wednesday, the IAEA report said Iran had fully installed a total of 1,008 new-generation centrifuges at the underground Natanz complex and was planning to test their performance ahead of feeding them with uranium material.
Iran's progress in introducing advanced centrifuges is under close scrutiny in the West and Israel - which is assumed to have the Middle East's only nuclear arsenal - because this would enable Tehran to speed up its accumulation of material that could be put to producing atomic bombs.
The machines were "under vacuum", an important step towards starting them up, the report said. Iran, it added, had also completed preparations for installing about 2,000 more advanced centrifuges, which experts say could increase the rate of refinement by two- or three-fold.
The rapid installations at a production unit at the Natanz underground enrichment site so far this year indicates that Iran can manufacture such equipment, at least to some extent, itself despite tightening sanctions on the country.
Centrifuges spin at supersonic speed to produce enriched uranium, which Iran says it needs to fuel a planned network of nuclear power plants. But if further refined, uranium can also provide the explosive core of a nuclear bomb.
The report further said Iran had begun making nuclear fuel for its planned Arak heavy-water research reactor but had put off its commissioning beyond the planned first quarter of 2014.
The delay "was in the stars already because many people couldn't believe the schedule. But this is the first time that Iran acknowledged this," an international official familiar with the issue said. The IAEA said Iran had only told it of the postponement on Sunday, three weeks after Rouhani was sworn in.
Western leaders are concerned the Arak complex could offer Iran a second path to weapons-grade fissile material by churning out plutonium. Iran denies any such intention, saying the Arak facility is to produce isotopes for agriculture and medicine.
Israel has threatened to attack Iran if diplomacy fails to rein in its programme and it amasses enough medium-enriched uranium to make a nuclear weapon, if refined further.
But the election of Rouhani, who served as chief nuclear negotiator under Ahmadinejad's reformist predecessor, Mohammad Khatami, has raised cautious Western hopes of breaking the prolonged, increasingly volatile deadlock in the negotiations.