An IAEA report on Iran will be presented to the IAEA's board of governors in Vienna at a September 8-11 meeting, and were Iran to be found in breach of its commitments the matter could be referred to the UN Security Council.

On a visit to Tehran on Saturday, European Union foreign policy chief Javier Solana said it would be "bad news" if Iran did not sign an additional protocol to the nuclear Non-Proliferation Treaty (NPT) and warned Tehran against bargaining.

"We want it to be signed: the sooner the better," Solana said. "It brings trust and confidence to the officials in Vienna and the members of the international community."

Brussels last month warned that if Iran did not sign the protocol, it would review its economic ties with Iran following the IAEA meeting.

The European Union, which is negotiating a trade pact with Tehran, seemed to be moving closer to the position taken by Washington, which has accused Iran of secretly seeking to develop nuclear weapons.

According to diplomats here, there are no indications that Iran will sign the protocol before September 8.

"Iran could be tempted to gain time. The decision to open negotiations on signing the protocol could be part of this tactic," said one, referring to Tehran's announcement on Tuesday that it was seeking clarifications but had a "positive approach" to the protocol.

In a surprise announcement Friday, Moscow said it would delay until the end of the year the signing of an accord under which Iran would return all spent nuclear fuel from its Bushehr nuclear reactor that is being built in southern Iran with Russian help.

The announcement appeared to be a direct concession to Washington's concerns that Iran could re-process the used fuel to create low-grade nuclear weapons. Washington had been pressing Russia to suspend the project with Tehran until it agreed to more stringent checks.

This, in addition to the findings of the IAEA report, will strengthen the case put forward by the United States and France who suspect Iran is secretly trying to develop weapons and raise the burden on Tehran to take swift action.

Within Iran, the issue of signing the protocol has raised a debate, with some media voices arguing Tehran should refuse to sign the protocol because it would give Western inspectors unimpeded access to military sites.

On Tuesday, the Iranian government reiterated these concerns, saying it wanted total guarantees that IAEA inspectors would not be given complete freedom of movement.

Diplomats and nuclear experts said in Vienna this week that IAEA experts had found in Iran two forms of highly enriched uranium molecules not needed in civilian energy programs, something presented in the report.

This in itself did not mean Iran was developing nuclear weapons, but one expert said the question was why Tehran conducted these enrichment activities covertly.

The report also says Iran had admitted to working with heavy water, which some nuclear states use to produce plutonium, in the 1980s.

Tehran also conceded for the first time that it had imported nuclear equipment, the sources said, adding that the IAEA was investigating which countries had helped Iran in this.

"These admissions came under duress, Iran changed its story because IAEA inspectors have found evidence that made it impossible for it to do otherwise," one official said.

However, Foreign Minister Kamal Kharazi said on Thursday that the particles had been brought into Iran on imported equipment that had been contaminated.

All rights reserved. Copyright 2003 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

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