Iran to unveil new nuclear fuel advance: report

MOSCOW (Reuters) - Iran will present a new advance in its atomic program Wednesday by loading domestically made nuclear fuel into a research reactor in the capital Tehran, a senior Iranian official told a Russian news agency Tuesday.

Russia's RIA news agency, in a story from Tehran, quoted Ali Bagheri as saying President Mahmoud Ahmadinejad would attend the event at a reactor which is running out of nuclear fuel originally provided by Argentina in the 1990s.

The move appeared designed to show that increased sanctions are failing to halt Iran's technical progress and to strengthen its hand in any renewed negotiations with the major powers.

Diplomats believe Iran has in the past sometimes overstated its nuclear achievements to gain leverage in its standoff with Western powers, which suspect Iran is seeking to develop the means to make atom bombs, a charge the country denies.

The RIA story gave few details and it was not clear whether the development was linked to Iran's announcement last month it had made and tested fuel rods for use in nuclear power plants.

Ahmadinejad said Saturday Iran would soon announce new advances in its nuclear program.

"Fuel elements, for the first time created by Iranian scientists, will in the presence of the president ... be loaded into the Tehran research reactor," Bagheri, deputy secretary of Iran's Supreme National Security Council, was quoted as saying.

Mark Hibbs, a nuclear expert at the Carnegie Endowment for International Peace, said he did not believe the Iranian announcement signaled any mass production of nuclear fuel.

"We are talking about laboratory-scale production of a single element for the reactor," he said.

Spent fuel can be reprocessed to make plutonium, potential bomb material, but Western worries about Iran's nuclear program are focused on its enrichment of uranium, which can also provide the core of nuclear weapons if refined much more.

Western powers fear that Iran's uranium enrichment program is part of a covert bid to develop the means to build atomic weapons - suspicions that were given independent weight by a detailed U.N. nuclear watchdog report late last year.

Iran says it is refining uranium for a planned network of nuclear power plants. The Tehran research reactor makes medical isotopes to treat cancer patients.

"They want to show that they have the technical expertise to master the fuel cycle," one European diplomat in Vienna said. "It would not be entirely unlike them - even at a time when they are feeling under pressure - to try to make another demonstration of that."

There was no immediate comment from the International Atomic Energy Agency, the Vienna-based U.N. nuclear watchdog.

In 2010, Iran alarmed the West by starting to enrich uranium to a fissile purity of 20 percent, up from 3.5 percent usually required for power plants, bringing it significantly closer to the 90 percent level required for weapons.

Iran said it was forced to take this step to make fuel for the Tehran research reactor after failing to agree terms for a deal to obtain it from the West. But many analysts doubted it would be able to convert its uranium into special reactor fuel.

"To provide fuel for the Tehran research reactor, as Western countries were not ready to help us, we have started to enrich uranium to 20 percent," RIA quoted Bagheri as saying.

Hibbs said the announcement of domestically made fuel was meant to show the world that Iran's intentions were peaceful.

"The message of this is that the higher enriched uranium that they are producing is for peaceful use," he said.

(Reporting by Guy Faulconbridge in Moscow and by Fredrik Dahl in Vienna; editing by Maria Golovnina)