Iran sets up 328 centrifuges at big atom site: sources

By Mark Heinrich

VIENNA (Reuters) - Iran has set up two cascades of 164 centrifuges each in its underground nuclear plant, laying a basis for full-scale enrichment of uranium and upping the stakes in a standoff with the West, European diplomats said on Monday.

The cascades were to be vacuum-tested shortly, without uranium feedstock inside, and fuel material would then be added if the trial runs were successful, they said.

The 328 centrifuges would be the vanguard of 3,000 planned for installation in the coming months.

Iran recently finished installing piping, electrical cables and other equipment needed to begin so-called "industrial-scale" enrichment in the vast subterranean complex, which is fortified and ringed by anti-aircraft guns in the central Iranian desert.

Firing up the cascades would dramatically sharpen Iran's confrontation with Western powers that pushed through limited U.N. sanctions on Tehran six weeks ago to try to curb what they suspect is a disguised effort to assemble atomic bombs.

The Islamic Republic, the world's No. 4 oil producer, says it wants solely civilian atomic energy from uranium enrichment.

Diplomats said the launch of the first two cascades may be the gist of Iran's planned announcement of "significant" nuclear progress on February 11, when it crowns 10 days of celebrations marking the anniversary of its 1979 Islamic Revolution.

"Two cascades have been installed in the underground plant, but they are not running yet," said a European Union diplomat in Vienna, headquarters of the watchdog International Atomic Energy Agency (IAEA), which has inspectors at Natanz.