VIENNA (Reuters) - Iran plans to soon start moving nuclear material to an underground site for the pursuit of sensitive atomic activities, diplomatic sources say, a move likely to add to Western fears about Tehran's intentions.
They said a first batch of uranium hexafluoride gas (UF6) -- material which is fed into machines used to refine uranium -- would be transferred to the Fordow site near the holy city of Qom in preparation for launching enrichment work there.
Enriched uranium can be used to fuel nuclear power plants, Iran's stated aim, or provide material for bombs if processed to a higher degree, which the West suspects is its ultimate goal.
Iran's main enrichment plant is located near the central town of Natanz. But the country announced in June it would move its higher-grade activity to Fordow, a subterranean facility offering better protection against any military attacks.
"For the first time they will have nuclear material in Fordow," one diplomatic source said. The step to bring a first cylinder of UF6 to a site is usually taken as part of the final preparatory work before starting production, the source said.
Iranian diplomats were not immediately available for comment on this information.
It would be a further sign of the Islamic Republic's determination to press ahead with a nuclear programme the West fears is geared towards developing atomic weapons but which Iran says is for peaceful purposes only.
It comes at a time of heightened tension over an alleged Iranian plot to kill the Saudi ambassador to Washington, a U.S. charge that Tehran rejects as a cynical attempt by its arch foe to further isolate the Islamic Republic.
Next month the U.N. nuclear watchdog is expected to publish a report that is likely to heighten suspicions that Iran has been carrying out nuclear work with possible military aspects.
Analysts say the findings in the report of the International Atomic Energy Agency (IAEA) could bolster the West's case for imposing additional sanctions on the major oil producer.
"The IAEA has a lot of information that would allow the agency to come to clear findings on the issue of possible military dimensions," one Western official said.
Iran's refusal to suspend uranium enrichment and answer IAEA questions about allegations over the nature of its nuclear work has drawn four rounds of U.N. sanctions as well as separate U.S. and European punitive measures.
Israel and the United States have not ruled out pre-emptive strikes to prevent Iran producing nuclear weapons.
Iran only disclosed the existence of Fordow -- tucked deep inside a mountain on a former military base -- to the IAEA in September 2009 after learning that Western intelligence agencies had detected it.
Four months ago, Iran said it would raise enrichment to a fissile purity of 20 percent from Natanz to Fordow and triple production capacity of the material -- an announcement that was condemned by its Western adversaries.
In its last report on Iran's nuclear programme, in early September, the IAEA said Iran had installed one of two planned cascades, or interlinked networks, of 174 centrifuges each at Fordow. Such machines spin at supersonic speeds to increase the fissile isotope ratio.
Iran's decision in early 2010 to raise the level of some enrichment from the 3.5 percent purity needed for normal power plant fuel to 20 percent worried Western states that saw this as bringing it closer to the 90 percent needed for bombs.
"That's a significant step closer to making an atomic bomb because it takes only a few months to turn that into weapons-grade material," former IAEA Deputy Director General Olli Heinonen told Der Spiegel magazine.
Tehran says it will use 20 percent uranium to convert into fuel for a research reactor making isotopes to treat cancer patients, but Western officials say they doubt that the country has the technical capability to do that.
Some analysts believe Iran is still a few years away from being able to build a nuclear-armed missile, if it decided to.
Editing by Mark Heinrich