U.N. watchdog report seen saying some progress on Iran

By Mark Heinrich

VIENNA (Reuters) - A crucial U.N. watchdog report this week is likely to say that Iran has improved cooperation with a long-running inquiry into shadowy atomic work, but diplomats say it may not be enough to answer any key questions.

The timing and toughness of any further U.N. sanctions against Iran will hinge on world powers' interpretation of the International Atomic Energy Agency report and a parallel report by the EU's top diplomat on recent dialogue with Tehran.

Diplomats have little doubt the European Union's Javier Solana will confirm that Iran remains unwilling to suspend uranium enrichment, which Iran says is to generate electricity but the West fears is to make atom bombs.

Tehran's continued defiance of U.N. Security Council demands to stop enrichment alone would trigger moves to wider sanctions in the view of the United States, Britain, France and Germany, citing a game plan agreed in September with Russia and China.

But the IAEA report, due on Wednesday or Thursday, is likely to show some Iranian steps towards transparency about its nuclear program, diplomats accredited to the agency said.

This could spur veto-holding Russia and China to persist in delaying harsh sanctions, arguing for more time for the IAEA process to bear fruit and against steps to isolate Tehran which they regard as a slippery slope to war.

"We may well see some clear cooperation from Iran but it's unclear whether it will be enough to actually move forward in the 'work plan'," a Western diplomat said, referring to IAEA questions Tehran promised in August to resolve one by one.

IAEA chief Mohamed ElBaradei considered a rare visit to Tehran before the report, a diplomat close to the agency told Reuters last week, amid hints of inadequate Iranian cooperation, including Russian and Chinese calls on Tehran for more openness.

But he decided not to go as he was not assured he would be able to see certain top officials, the diplomat said.

On Tuesday the IAEA denied media reports Iran had rejected an ElBaradei request for a meeting. "This is false. He has a standing invitation to meet senior officials. He contemplated accepting it but due to conflicting schedules he decided to do this visit at a later time," said spokeswoman Melissa Fleming.

CRITICAL CENTRIFUGE ISSUE

Iran said on November 3 it gave the IAEA all information needed to remove ambiguities about the first major issue on the list -- work to develop centrifuges which enrich uranium -- and there would be no more discussions about it.

Diplomats said there were indications Iran had turned over centrifuge documentation that was withheld for years, among various indications of efforts to militarize the program.

It was unclear, they said, whether Iran had granted the IAEA long-sought interviews with certain nuclear program leaders believed to have had military links, or visits to workshops developing a high-performance centrifuge known as the P-2.

Both steps would be key to closing the centrifuge file. Iran so far has been refining uranium with an old, erratic P-1 model.