Iran slow to markedly expand atom work

By Mark Heinrich

VIENNA (Reuters) - Iran seems to have made little progress towards enriching uranium in significant amounts this summer but it is unclear whether technical problems or fear of stiffer U.N. sanctions lie behind the slowdown, diplomats say.

"It could be technical, it could be political, it could be both. We need to understand the reasons," said a senior diplomat familiar with International Atomic Energy Agency inspections at the Islamic Republic's underground Natanz enrichment complex.

"But they are apparently still far away from (producing nuclear fuel in usable quantities)," he said ahead of a detailed IAEA report on Iran due on Wednesday and which six world powers will scrutinise to guide any further moves on sanctions.

Coupled with the halting enrichment pace is a new Iranian pact with the IAEA to resolve, in phases lasting through the end of the year, questions about its nuclear activity that first raised Western suspicions about an illicit quest for atom bombs.

Still, Tehran has denied any enrichment hold-up. It insists work is progressing normally and "non-stop", rejecting IAEA calls for at least a halt to expansion beyond current activity to revive negotiations on a peaceful solution to the crisis.

Washington has said Iran's persistent refusal to suspend enrichment, and what it calls holes in Iran's transparency deal with the IAEA suggesting it will not be fulfilled, mean big powers will pursue consultations on tougher sanctions.

After installing centrifuges, machines that can enrich uranium for electricity or explosives, at what seemed breakneck pace this spring, Iran looked set to have 3,000 running in July -- enough to launch "industrial scale" output of nuclear fuel.

BELOW PRODUCTIVE CAPACITY