Another diplomat said bringing in centrifuge parts had started last week.

But Iran has not yet assembled a complete line, or cascade, of centrifuges, the basic unit for beginning actual enrichment, said the diplomats, who asked not to be named due to the sensitivity of the issue.

Still, if construction has started at the underground facility in Natanz, in central Iran, it would be a major step in the international showdown with Iran over a nuclear programme which the United States and others suspect is hiding secret development of an atom bomb.

It comes at a time when Iran is under sanctions from the UN Security Council to force it to suspend enrichment.

Uranium enrichment uses centrifugues to make fuel for civilian nuclear reactors but can also produce the explosive material for atom bombs.

Iran had last weekend given conflicting signals on its disputed nuclear work.

The Islamic republic's atomic energy agency denied the Iranians had started to install 3,000 centrifuges to enrich uranium, shortly after the head of parliament's foreign affairs and national security commission said they had.

Iran is building cascades in units of 164-centrifuges each.

Iran already has two such cascades running above-ground at a pilot enrichment plant at Natanz which would only produce small amounts of enriched uranium.

But the underground plant, protected as in a bunker from possible air attack, could if running full tilt produce enough highly enriched uranium for one bomb in one year, experts have said.

earlier related report
Iranians block UN inspectors at nuclear facility: diplomats
Vienna (AFP) Feb 01 - Iran is stopping UN inspectors from installing cameras at a nuclear facility where Tehran intends to place 3,000 centrifuges for industrial-scale uranium enrichment, diplomats said Thursday. Inspectors from the UN watchdog International Atomic Energy Agency (IAEA) are currently at the facility in Natanz in central Iran, where an underground site is being completed.

But the Iranians are "not allowing the IAEA to install the cameras inside the (underground) cascade halls (for centrifuges) in Natanz and are causing further delays in the inspectors' activity," a diplomat who closely monitors IAEA verification work told AFP.

This latest hitch in the international showdown with Iran over a nuclear programme, which the United States and others suspect is hiding secret development of an atom bomb, comes with the Islamic Republic under UN sanctions to force it to suspend enrichment.

Uranium enrichment uses centrifugues to make fuel for civilian nuclear reactors but can also produce the explosive material for atom bombs.

The Iranians have said they will install in a large underground site in Natanz lines of centrifuges, in so-called cascades, in order to enrich uranium.

Iran is already running two cascades of 164-centrifuges each at a pilot facility above-ground, which the IAEA monitors with cameras and visits by inspectors.

The IAEA is entitled under the nuclear Non-Proliferation Treaty to the same sort of presence at the underground facility.

"The Iranians are now willing to accept the installation of cameras only outside the cascade halls, which will not enable the IAEA to monitor the entire uranium enrichment process," said the diplomat, who requested anonymity.

The diplomat said: "This way the IAEA will only be able to see the crates that are taken into the hall and the workers coming and going.

"Uranium enrichment will nevertheless proceed inside the halls uninterrupted and unmonitored by the international community," the diplomat added.

Two other diplomats confirmed the impasse.

One said: "Whenever something new is done, normally it takes time," referring to problems the IAEA has had in setting up verification equipment in other countries.

IAEA spokeswoman Melissa Fleming refused to comment.

The IAEA has been investigating Iran since February 2003 after it was revealed that Tehran had hid sensitive nuclear activities for 18 years.

But the atomic agency has been unable to conclude its inquest due to what it says is a lack of full cooperation from Iran.

The UN Security Council passed a resolution in December imposing sanctions on Iran for its refusal to halt uranium enrichment although the measures are not seen as far-reaching enough to hurt Iran's wider economy.

Iranian leaders have said Iran would make a major announcement on its nuclear programme during the 10 days of celebrations to mark the 28th anniversary of the Islamic revolution starting Thursday.

The news is expected to relate to Iran's progress towards enriching uranium on an industrial scale at Natanz.

Iran could be only two or three years away from being able to produce a nuclear weapon, John Chipman of the London think-tank the International Institute for Strategic Studies said Wednesday.

But he stressed that Iran still faced other obstacles before it could build a weapon.

While Iran is "probably" on track to hit a target of installing 3,000 centrifuges in Natanz by the end of March, making them function properly would be complicated, Chipman said.

These developments come amid growing speculation the United States and Iran are on a course towards conflict.

Although US President George W. Bush has said the United States has no plans to invade Iran, Washington is isolating the Iranian regime over nuclear suspicions and allegations of complicity in attacks on US troops in Iraq.

earlier related report
US: No dispute with Chirac on Iran
Washington (AFP) Feb 01 - The United States on Thursday played down French President Jacques Chirac's retracted statement that a nuclear-armed Iran would not be "very dangerous," and said Tehran must not get atomic weapons.

"We have no doubts about France's dedication to that policy objective," US State Department spokesman Sean McCormack said, adding "we all deserve a mulligan now and again" -- a reference to a golfing second chance.

At the White House, spokesman Tony Snow noted that Chirac had "revised and extended" his comments, which also included a prediction that Tehran would be "razed" if it launched a nuclear strike at Israel.

"The fact is our position on Iran is clear, they shouldn't have any nuclear weapon and furthermore they ought to take steps to suspend uranium enrichment and reprocessing activities," said Snow.

"That is not only the stated position of the United States but also its allies, including France, in terms of dealing with the Iranians," the spokesman told reporters.

"Let's also make it clear that we have offered conditions in which we would talk with the Iranians and that is: You take these steps on the nuclear program, there is going to be an opportunity to talk about a whole range of issues that are going to be very good for the Iranian people," said Snow.

"Having one or perhaps a second bomb a little later, well that's not very dangerous," Chirac said in the interview to the New York Times, the Paris-based International Herald Tribune and the French weekly Nouvel Observateur.

"Where would Iran drop this bomb? On Israel?" he asked. "It would not have gone off 200 meters into the atmosphere before Tehran would be razed to the ground," Chirac was quoted as saying by the three publications.

The president gave the interview on Monday but called the journalists back to the Elysee Palace the following day to say that he was retracting the statement.

"It is I who was wrong and I do not want to contest it," Chirac was quoted as saying by the IHT. "I should have paid better attention to what I was saying and understood that perhaps I was on the record."

"It was an oversimplification... It is a formulation that I am taking back," the Nouvel Observateur quoted him as saying.

"He came back and took a proactive step to clarify what France's policy position is and I'm going to take that at face value," said McCormack.

In fact, Paris has steadfastly opposed any attempt by Iran to develop nuclear weapons, with Chirac recently accusing Tehran of "feeding the world's apprehension" with its atomic program.

The presidential press service said Thursday that Chirac had given "an extremely condensed and oversimplified" view of his Iran policy in the interview and that he sought to "correct" it the following day.

France has taken a leading role with Britain and Germany -- with US backing -- in trying to persuade Iran to suspend its nuclear enrichment program and comply with international demands for monitoring of its atomic facilities.

Tehran has defied calls to suspend enrichment work, rejecting US allegations it wants nuclear weapons and insisting its atomic drive is solely aimed at producing nuclear energy.

After Chirac recanted, an Elysee official later criticized the reports as an attempt to create a "shameful polemic on an issue where France and the president of the Republic have always been consistent and determined."

"This is not surprising from certain media across the Atlantic that do not hesitate to use any pretext against France," said the official.

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