Aghazadeh would head a delegation "for technical talks" at the headquarters in Vienna of the International Atomic Energy Agency (IAEA), one diplomat said Tuesday.

A second diplomat said Aghazadeh would meet IAEA director general Mohamed ElBaradei but IAEA officials refused to confirm this.

Iranian President Mahmud Ahmadinejad said Monday that the Islamic Republic was refusing to suspend uranium enrichment, a process that can be used to produce fuel for civilian nuclear reactors and, when continued much further, to manufacture atom bomb material.

The first diplomat said the Iranian visit was unlikely to produce a breakthough.

"(It) doesn't mean much actually. I don't see that the Iranians are going to come around," he said. "It's more of a pacifying gesture."

ElBaradei had personally appealed during a trip to Tehran earlier this month for Iran to comply with IAEA demands to halt enrichment and cooperate with IAEA inspectors.

The UN Security Council on March 29 set a non-binding deadline for Iran to honor the IAEA requests within 30 days. ElBaradei is to report to the Council on Friday on whether those demands have been met.

If Iran does not heed the Friday deadline, the Security Council could make it legally binding for Tehran to suspend enrichment and cooperate with the UN investigation of its nuclear program. The investigation process has been going on for more than three years.

This move could open the door to international economic sanctions or even military action, something the United States has not ruled out.

Iran's national security chief Ali Larijani said Tuesday that the Islamic Republic would break off relations with the IAEA if sanctions were imposed and warned a military attack would merely send its nuclear activities underground.

Larijani also refused to rule out using oil as a weapon in the worsening international standoff, warning of "important consequences" for energy supplies if Iran was subjected to "radical measures".

US Secretary of State Condoleezza Rice said in Athens Tuesday that Iran was deepening its international isolation in the crisis over its nuclear program but insisted Washington wanted a diplomatic solution.

"The US president does not take any options off the table but we are on a diplomatic course here. That is the agenda that we are pursuing," Rice said.

The IAEA's most senior inspector after ElBaradei, director of safeguards Olli Heinonen, last week delayed a trip to Iran in the light of what diplomats said was a clear sign that Tehran was failing to heed IAEA demands.

The United States believes ElBaradei's report to the Security Council this week will show that Iran has failed to comply with the IAEA demands, Gregory Schulte, US ambassador to the IAEA, said in Berlin Tuesday.

"It is hard to imagine that the director general will be able to produce a positive report on Friday," Schulte told journalists.

Schulte said that any hope ElBaradei had of a change in Iran's position would have been dashed by his visit to Iran this month.

On the eve of the trip, the Islamic republic announced it had successfully enriched uranium and would move towards full enrichment activities.

The West, led by the United States, suspects Iran of seeking to develop nuclear weapons. But Tehran insists its nuclear program is peaceful and that it only wants to enrich uranium to make fuel for generating nuclear power.

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