The State Department said the penalties, imposed under the Iran Nonproliferation Act of 2000, apply to five Chinese, two Macedonian and two Russian companies as well as one firm each from Belarus, North Korea, Taiwan and the United Arab Emirates.

The sanctions were imposed because of "credible information" that the firms had transferred to Iran since 1999 equipment and technology that "have the potential of making a material contribution to WMD, or cruise or ballistic missile systems," deputy spokesman Adam Ereli said.

US officials said a significant amount of that information had come from the unraveling of Pakistani scientist AQ Khan's illicit nuclear proliferation network.

The targetted companies will be banned from exporting goods to or receiving contracts or assistance from the United States and US firms will be barred from trading with them for two years.

The United Nations International Atomic Energy Agency (IAEA) has been investigating since February 2003 whether Iran's nuclear program is peaceful, or devoted to secretly developing atomic weapons, as the United States alleges.

A group of IAEA inspectors arrived in Iran on Saturday.

The IAEA is to report its findings at a meeting in Vienna in June that the agency's chief Mohammed ElBaradei has said will be "key in the ... consideration of Iran's implementation" of the nuclear Non-Proliferation Treaty (NPT).

An IAEA ruling that Iran is in non-compliance with the NPT would send the issue to the UN Security Council, which could then impose sanctions on the Islamic republic.

Iran, under massive international pressure to maintain the suspension of uranium enrichment, has consistently emphasised its right under the NPT to produce nuclear fuel for what it insists are strictly peaceful purposes.

The Los Angeles Times reported Saturday that Iran has set up a secret government committee overseeing efforts to conceal key elements of the country's nuclear program from international inspectors.

Citing unnamed Western diplomats and an intelligence report, the newspaper said that if the cover-up is confirmed, it would bolster the US assertion that Iran is trying to hide a secret nuclear weapons program.

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