A Western diplomat told AFP the leadership of the International Atomic Energy Agency (IAEA) had "no intention of cooperating (on the Arak reactor) while Iran is out of compliance with United Nations Security Council resolutions" to rein in its nuclear program.

US ambassador to the IAEA Gregory Schulte said in a speech in Vienna last week that given "the widespread mistrust of Iran's nuclear program and the risk of plutonium being diverted for use in weapons, the United States and other board members cannot agree to have the IAEA assist the project at Arak."

The IAEA's 35-nation governing board, which opens a week-long meeting Monday in Vienna, had in February asked Iran to "reconsider" building a heavy-water reactor at Arak, 200 kilometres (120 miles) south of Tehran.

This was re-stated in a UN Security Council resolution in July, which also called on Iran to suspend making enriched uranium, which like plutonium can be fuel in civilian reactors but used in highly enriched form to make atom bombs.

The Council is now working on a resolution to impose sanctions on Iran, as Tehran has refused to suspend uranium enrichment.

Schulte said the Arak reactor "could produce enough plutonium for one or more nuclear weapons a year."

Iran says it is building the 40-megawatt, heavy-water reactor, which is expected to be ready by 2009, to produce medical isotopes and to replace a smaller, aging, five-megawatt light-water reactor in Tehran which came online in 1967.

The United States and five other world powers have offered to give Iran a light-water reactor, which would use low-enriched uranium as fuel, as an alternative.

But Iran has vowed to press ahead with the Arak reactor, even without IAEA help.

The expected IAEA postponement of aid to Arak would be a compromise as the United States would like the agency simply to reject Iran's request for help in "strengthening safety capabilities" at the heavy-water reactor, diplomats said.

Non-aligned states such as Malaysia fear an outright rejection could set a precedent for denying technical aid for peaceful nuclear programs in developing countries, diplomats said.

The IAEA has after over three years of investigation not yet ruled on whether Iran is hiding work on developing nuclear weapons, as Washington claims, or carrying out what Tehran says is a peaceful effort to generate electricity.

A Middle Eastern diplomat said that Iran's request for technical cooperation at Arak had been filed with "due process" and was "not a proliferation risk as far as the (IAEA) secretariat is concerned."

But the diplomat said "politics is involved so a way must be found around this."

Iran's IAEA ambassador Ali Asghar Soltanieh told AFP that it "is in the interests of the international community that all nuclear reactors be safe."

The Iranian request for safety aid at Arak is "based on the statutes of the IAEA... and has nothing to do with and is not contrary to any of the (IAEA) resolutions," Soltanieh said.

He said the Arak reactor would run on natural uranium and not the highly enriched uranium needed for the Tehran research reactor and which the West rejects as a proliferation risk.

Soltanieh criticized what he called "the contradictions in the positions of the Americans and Europeans. They don't understand the physics of it (the situation) and have politicized" the technical process.

The IAEA board will from Monday to Wednesday finalize its proposals for technical cooperation, with 832 projects under consideration, eight in Iran, and then decide on them in a session Thursday and Friday.

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