IAEA warns of Iran atomic risk amid EU-Tehran talks

By Mark Heinrich and Karin Strohecker

VIENNA (Reuters) - Iran's nuclear behavior poses a serious concern it might gain the ability to build atom bombs, the U.N. atomic watchdog agency said on Monday as Tehran and the EU resumed talks but dampened expectations of a breakthrough.

Underlining tensions, Tehran cancelled a meeting set between its deputy nuclear negotiator and two top International Atomic Energy Agency officials as he was loath to discuss substance on IAEA questions about Iranian activity, diplomats said.

Javad Vaeedi did meet Robert Cooper, a top aide to European Union foreign policy chief Javier Solana, for 4 1/2 hours to smooth the way to further talks between Solana and Iranian chief negotiator Ali Larijani.

Vaeedi called the session "constructive" and Cooper spoke of "progress". But both cautioned people not to expect "miracles".

There was no sign of headway towards settling the core dispute. Iran refuses to suspend its expanding nuclear fuel program in exchange for a suspension in U.N. sanctions and negotiations on trade benefits offered by world powers.

"We will continue our enrichment activities and nuclear activities without pause," Ali Asghar Soltanieh, Iran's ambassador to the IAEA, said on Iranian state radio.

Citing Iran's stonewalling of IAEA inquiries into the scope of its program, Western powers fear Tehran is trying to develop atomic bombs behind the facade of a civilian nuclear energy program it says is for generating electricity.

IAEA director Mohamed ElBaradei told a meeting of its governing board Iran had made itself the agency's No. 1 nuclear proliferation concern by significantly broadening its uranium enrichment campaign while curbing cooperation with inspectors.