"The Iranian nuclear program does not currently respect the conditions set in the treaty for the right to the peaceful use of nuclear energy," French ambassador Jean-Francois Dobelle told 130 states at a conference in Vienna on improving the 189-nation NPT, the world's basic agreement against the spread of nuclear weapons.

The UN watchdog International Atomic Energy Agency "has determined that Iran is not respecting its (NPT) safeguards agreement," Dobelle said, referring to IAEA resolutions that Tehran has hidden sensitive nuclear work and is not fully cooperating with IAEA inspectors.

The UN Security Council has imposed two rounds of sanctions on Iran for defying a call to stop enriching uranium, and the five permanent Council members plus Germany met in Berlin Thursday to discuss how to handle the crisis.

The United States is the leading nation in charging that Iran is trying to develop nuclear weapons under the cover of a peaceful program to generate atomic power.

But Iranian official Hamid Baeidi Nejad said it was "unwarranted ... to take legally flawed, unnecessary and unjustified action against the peaceful nuclear program of my country."

He said UN sanctions against Iran for continuing to enrich uranium were aimed "at depriving our nation of its inalienable rights" to a civilian nuclear program under IAEA statutes.

The conference in Vienna is the first of several meetings ahead of a general review in 2010 of the landmark treaty, which came into effect in 1970 and which many complain has a flaw since it allows states to peacefully develop technology that can also be used to make atom bombs.

North Korea developed nuclear weapons after withdrawing from the NPT.

Iran had held up debate here for six days as it objected to an agenda item calling for full compliance with the NPT but diplomats said serious work was finally underway this week, with the meeting to end Friday.

British ambassador John Duncan told reporters: "Despite the best efforts of the Iranians, this conference has really demonstrated the common interest of the world community in dealing with nuclear issues."

Duncan said the meeting was "characterized by an open and often frank dialogue and that represents a watershed in recent arms control and disarmaments discussions. That is very encouraging for the future."

The conference also debated a the idea of a Middle East Nuclear Weapons Free Zone, as Arab nations criticized Israel for developing nuclear weapons and for not signing the NPT.

Indonesian representative Triyono Wibowo on behalf of the non-aligned movement noted "with regret that no progress has been achieved with regard to Israel's accession to the treaty."

Iran blocked UN inspectors on test visit to nuclear site
Vienna (AFP) May 10 - Iran blocked UN atomic experts on a first unannounced test inspection of an underground nuclear site where it enriches uranium, despite a pledge to allow such visits, diplomats told AFP Thursday. The watchdog International Atomic Energy Agency had in March told Iran to allow its inspectors to install surveillance cameras at the site in Natanz but Tehran refused this and in return agreed to allow frequent, unannounced visits.

A first test on April 21 of the agreement "was a total failure," said a diplomat in Vienna, home to the IAEA, who added that a successful unannounced inspection has not yet taken place.

At stake is Iranian compliance with inspections by the IAEA, the verification arm of the nuclear Non-Proliferation Treaty, the world's basic agreement against the spread of atomic weapons.

Iran is defying UN demands for it to stop enriching uranium, which makes fuel for civilian nuclear power reactors but can also produce the explosive core of atom bombs.

The UN Security Council has imposed two rounds of limited sanctions on Iran because of this defiance and due to fears it is using what it says is a peaceful program to hide the development of nuclear weapons.

The IAEA is to report to the Council on May 23 on Iran's nuclear activities, and then meet on the matter in June.

A negative IAEA report could lead to a third round of sanctions against Iran.

"The Iranians did not let the IAEA inspectors into the halls where the cascades of centrifuges are," the diplomat said about inspections at Natanz, referring to the production lines of centrifuges which enrich uranium.

"So they couldn't get details of what is going on there," the diplomat said.

Problems with inspections were confirmed by two other envoys in Vienna.

Both Iranian and IAEA officials refused to comment.

Another diplomat said the IAEA has made regular visits since then to the Natanz site, but not into the cascade hall and not unannounced inspections, and may try another surprise visit soon.

A source close to the Iranians said they were still trying to determine how to arrange unannounced visits.

Western diplomats have charged that Iran has a history of stalling on IAEA inspections.

The IAEA had reported in April that Iran has assembled some 1,300 centrifuges Natanz in central Iran.

A diplomat said there were now over 1,600 centrifuges functioning there, arrayed in 10 cascades of 164-centrifuges each.

Each cascade is being fed with the uranium gas needed for enrichment.

But the diplomat said the cascades were working "in slow motion" as the Iranians are afraid that setting them at top speed would cause them to break down.

"The Iranians are working at having a large number of centrifuges running, rather than how efficient the process is," the diplomat said.

Iranian President Mahmoud Ahmadinejad had announced in April that the Islamic republic's controversial uranium enrichment work had reached an "industrial scale," a stage that requires at least 3,000 centrifuges, but did not say how many centrifuges were working.

Russia, which is building Iran's first nuclear power plant, as well as other nations have cast doubts on whether Iran has reached such an industrial stage.

Iran wants eventually to have over 50,000 centrifuges in Natanz, which would be enough to make some 20 atomic bombs a year.

IAEA chief Mohamed ElBaradei had reported in February that cameras would be needed if Iran were running more than 500 centrifuges underground at Natanz in order to properly monitor the nuclear work.

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