Britain, France and Germany "are going to read the riot act to the Iranians," a diplomat close to the talks, which is aimed at getting Iran to guarantee that it is not developing nuclear weapons, told AFP.

The European trio, who are leading the negotiations for the European Union, are following advice from UN nuclear watchdog chief Mohamed ElBaradei "who has warned Iran in two letters in December and January" about quality control work on centrifuge parts despite an agreed freeze on nuclear fuel cycle work, said the diplomat, who asked not to be named.

But Iran was warning that it is running out of patience in talks that began in December on suspending uranium enrichment in return for possible cooperation in atomic technology, regional security and nuclear verification.

The talks are to lead to a high-level meeting in March, and Iran wants to see movement by then toward receiving those incentives.

"Our condition for a continuation of the talks is progress. Therefore, if the talks are not progressing (by March 20), we are not obliged to continue," top Iranian national security official Hassan Rowhani told state television in Tehran.

The United States would have to support the process, especially with trade carrots such as Iran joining the World Trade Organization on the table.

But Washington is not part of the European initiative and claims that Iran is secretly developing nuclear weapons.

The Geneva talks are being conducted in strict secrecy, with diplomats stressing that the long-term negotiations require confidence-building on both sides.

The meeting in Geneva is the third round of talks since they began in December in Brussels.

Tuesday's meeting, chaired by Britain, was on technology cooperation, with political security to be discussed Wednesday and the crucial nuclear dossier on Thursday, chaired by France, diplomats said.

The European trio want Iran to permanently abandon enrichment, the process that uses centrifuges to make fuel for nuclear reactors but which can also be the explosive core of atomic bombs.

Iran refuses to make its suspension permanent, saying it has the right to enrichment under the nuclear Non-Proliferation Treaty.

And there seems to be trouble even with the suspension, which Iran began in November after striking an agreement with the EU.

Iran has since then carried out maintenance work on centrifuge piping at an enrichment plant at Natanz, including taking parts such as valves to another location, Farayand, to test them, diplomats said.

"Maintenance work is totally permissible under the terms of the suspension. What you can't do is quality control work," the first diplomat said.

"This is coming close to being a breach of the suspension agreement but still short of forcing a breakdown in the talks," the diplomat said.

The diplomat said this is how the Iranians have acted on other sensitive matters in the two years that ElBaradei's International Atomic Energy Agency (IAEA) has been investigating Iran for violations of international nuclear safeguards.

"The Iranians did not report their quality control work. IAEA inspectors came across it by chance in their verification of centrifuge components in Farayand," the diplomat said.

A second diplomat said that Iran also seems close to violating safeguards agreements by not telling the IAEA about the building of tunnels at a facility in Isfahan to carry out work in converting uranium ore into the gas used in enrichment.

"The Iranians should have told the IAEA about this sooner than they did," the diplomat said.

"The Iranians are doing things that worry the Europeans," the diplomat said.

But the diplomat said recent comments from top US officials, such as Vice President Dick Cheney, supporting the European initiative and saying diplomacy should be given a chance was a "positive" development.

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