VIENNA (Reuters) -- Iran is preparing extra equipment to enrich uranium to higher levels and continues to stockpile nuclear material, a UN watchdog report said, developments likely to raise tensions with the West over its atomic work.
Washington, which is leading a push for a fourth round of sanctions against the Islamic republic, said the International Atomic Energy Agency report underscored Iran's refusal to comply with the international requirements needed for possible talks.
Tehran started refining uranium to the higher level of 20 percent in February, saying it wanted to produce fuel for a medical research reactor after talks with big powers on a fuel supply agreement stalled.
Earlier this month Brazil and Turkey resurrected parts of the proposal, under which Iran would ship 1.2 tons of its low-enriched uranium stockpile abroad in return for the fuel, seen as a way to reduce nuclear tensions with the West.
But the new IAEA report showed Iran's low-enriched uranium stockpile had grown to 2.4 tons, so that even if the 1.2 tons was shipped out now it would still leave Iran enough material for a nuclear weapon if enriched to higher levels.
Iran says its nuclear work is for peaceful uses only. But major world powers have recently backed a draft UN sanctions resolution against its atomic work.
"Based on this report Washington is going to feel justified in downplaying the Brazilian-Turkish-Iranian deal and focusing on sanctions instead," said David Albright, head of the Institute for Science and International Security.
Iran's raising of the enrichment level to 20 percent has heightened Western suspicions because it takes the material closer to the 90 percent purity needed to make atomic weapons.
The Islamic republic is also thought to lack the capability to make the special fuel assemblies needed for the medical research reactor.
The nine-page IAEA report showed Iran pushing ahead with higher-level enrichment and failing to answer the agency's questions about possible military dimensions to its nuclear work and address concerns about possible undisclosed activities.
"This latest IAEA report clearly shows Iran's continued failure to comply with its international obligations and its sustained lack of cooperation with the IAEA," White House National Security Council spokesman Mike Hammer said.
The report said Iran had added a second set of 164 centrifuges -- nuclear enrichment machines -- to help refine the uranium but they were not yet operational. At the time of the previous report in February, Iran had only one set of centrifuges installed for the work.
The Islamic republic has told the agency the extra machines will support the enrichment work by allowing material to be re-fed into the machines.
But analysts say they could be configured to expand the production, a move which would ring alarm bells in the West.