"The concern is that they will have a sensitive number of centrifuges without having resolved the question marks surrounding the history of Iran's program," a diplomat close to the UN watchdog International Atomic Energy Agency (IAEA) said.

"It becomes more sensitive the more they have. It becomes a greater proliferation concern," the diplomat told AFP.

The diplomat said IAEA chief Mohamed ElBaradei has been telling political leaders in private conversations that Iran was making "steady progress" in uranium enrichment and shows no sign of slowing down.

"ElBaradei is saying that Iran will have 8,000 centrifuges running if the current pace continues" at its enrichment plant in Natanz, the diplomat said, adding that, from a proliferation point of view, ElBaradei was becoming "increasingly concerned."

The IAEA has after more than four years of investigation failed to resolve key questions about Iran's nuclear program.

Tehran vehemently denies US accusations that it is seeking to build up a nuclear arsenal, saying it wants only to generate energy for a growing population when fossil fuels eventually run out.

The diplomat said Iran was increasing its enrichment capability without the IAEA having the inspection regime in place that is needed to monitor the Islamic Republic's atomic work.

A second diplomat close to the agency said that if the Iranians want to have this many centrifuges running, "they probably will."

Iran had, as of May 13, over 1,300 centrifuges enriching uranium at the underground, heavily bunkered facility in Natanz, according to ElBaradei.

Iran could reach its goal of industrial scale production with 3,000 centrifuges running by the end of June, a senior official close to the IAEA said.

That number, running at full capacity, could make enough enriched uranium for a bomb in a little less than a year, according to experts.

The UN Security Council has already agreed two sets of sanctions against Iran for ignoring its calls to suspend enrichment, and Western powers are now openly talking of a new resolution.

Washington says it wants a diplomatic solution but has not ruled out a military intervention and has placed sizeable naval forces in the Gulf.

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