(Reuters) - The U.N. nuclear watchdog planned a major report onIranthat might have revealed more of its suspected atomic bomb research, but held off as Tehran's relations with the outside world thawed, sources familiar with the matter said.Such a report - to have been prepared last year - would almost certainly have angeredIran and complicated efforts to settle a decade-old dispute over its atomic aspirations, moves which accelerated after pragmatic President Hassan Rouhani took office in August.
According to the sources, the International Atomic Energy Agency (IAEA) has apparently dropped the idea of a new report, at least for the time being.
There was no immediate comment from the IAEA. The sources said there was no way of knowing what information collected by the agency since it issued a landmark report on Iran in 2011 might have been incorporated in the new document, although one said it could have added to worries about Tehran's activities.
As relations rapidly improved, Iran struck an interim nuclear deal with six world powers in November whichIsraeldenounced as an "historic mistake" as it did not require Tehran to dismantle its uranium enrichment sites.
One source said probably onlyIsrael, which is believed to be the Middle East's sole nuclear-armed state, would criticize the IAEA for not issuing a new report in the present circumstances. Iran and the world powers hope to reach a final settlement by July, when the interim accord expires, although they acknowledge this will be an uphill task.
A decision not to go ahead with the new document may raise questions about information that theUnited Nationsagency has gathered in the last two years on what it calls the "possible military dimensions" (PMD) to Iran's nuclear program. Tehran says the program is peaceful and denies Western allegations that it is seeking to develop the capability to make bombs.
The sources, who declined to be identified due to the sensitivity of the issue, suggested the more recent material concerned extra detail about alleged research and experiments that were covered in the November 2011 report. A new report would probably have included "updated information on PMD" which could have "reinforced the concern" about Iran, one said.
The IAEA's dossier in November 2011 contained a trove of intelligence indicating past activity in Iran which could be used for developing nuclear weapons, some of which it said might still be continuing. Iran rejected the allegations.
It helped Western powers to step up the sanctions pressure on Iran, including a European Union oil embargo imposed in 2012, showing the potential significance of a decision on whether to publish the IAEA's findings.
Since then the agency has said it obtained more information that backs up its analysis in the 2011 document, which detailed allegations ranging from explosives testing to research on what experts describe as an atomic bomb trigger.
Other issues it wants Iran to address are alleged detonator development, computer modeling to calculate nuclear explosive yields, and preparatory experimentation that could be useful for any atomic test.
It says the "overall credible" information in the 2011 dossier - contained in an annex to a wider quarterly report - came from member states, believed to include Western powers and Israel, as well as its own efforts.
One source said it was believed that the Vienna-based IAEA had received more information on suspicions of nuclear yield calculations, but it was not known to what extent this would have made it into a new report on Iran.
IRAN SAYS CLAIMS BASELESS
"The agency has obtained more information since November 2011 that has further corroborated the analysis contained in that annex," it said on February 20 in a regular quarterly report on Iran's nuclear program. It has been investigating accusations for several years that Iran may have coordinated efforts to process uranium, test explosives and revamp a missile cone in a way suitable for a nuclear warhead. Iran says such claims are baseless and forged.
The sources said that last year's planned report would probably have amounted to a wider review of the Iranian nuclear file, including PMD and other outstanding issues.
They said the idea was raised internally when the IAEA's long-running efforts to get Iran to cooperate with its investigation appeared completely deadlock in mid-2013.
But with a new leadership in Tehran trying to end its international isolation, Iran and the IAEA agreed last November a step-by-step transparency pact to help allay concerns about the atomic activities. This was sealed shortly before the breakthrough deal between Tehran and the six powers - the United States,Russia,France,Germany, Britain andChina.
In follow-up talks on Feb 8-9, Iran agreed for the first time to address one of many PMD issues in the 2011 report, regarding so-called exploding bridge wire detonators, which can have both civilian and military applications.
"While other experiments with possible military dimensions must be addressed and soon, progress on the bridge wire detonators issue would be an important first step toward resolving these issues," said the Arms Control Association, a U.S. research and advocacy group, in a February 26 analysis.
But it remains uncertain when and how the IAEA will be able to look into more sensitive areas, including long-sought access to the Parchin military base southeast of Tehran, where it suspects explosives tests that could be used for nuclear bomb development took place a decade ago, a charge Tehran denies.
The IAEA inquiry is separate from, but still closely linked to, the wider diplomacy to end the years of standoff over the nuclear program that has raised fears of a Middle East war.
THE IAEA'S "JOB"
The interim agreement focused mainly on preventing Tehran obtaining nuclear fissile material to assemble a future bomb, rather than on whether Iran sought atom weapons technology in the past, which the IAEA is investigating.
The 2011 report portrayed a concerted weapons program that was halted in 2003 - when Iran came under increased Western pressure - but it also indicated that some activities may later have resumed.
Western diplomats and nuclear experts say the IAEA needs to complete its inquiry to establish what happened and to be able to provide assurances that any "weaponisation" work - expertise to turn fissile material into a functioning bomb - has ceased.
They say clarifying this is also important in being able to quantify the time Iran would need to dash for a nuclear weapon, if it ever decided to do so.
But it is unclear to what extent it will form part of any final settlement between Iran and the powers - which unlike the IAEA can lift crippling sanctions on the major oil producer and therefore have more leverage in dealing with Tehran.
"Some analysts have argued incorrectly that issues like Parchin and alleged military dimensions do not matter. According to their reasoning, these issues are in the past and should be overlooked," the Institute for Science and International Security, a U.S. think-tank, said this week.
However, Peter Jenkins, a former British ambassador to the IAEA, said Iran now appeared to be in full compliance with its obligations under the nuclear Non-Proliferation Treaty, and had "started to resolve residual ... questions about past nuclear-related activities and to shed light on future intentions".
A senior U.S. official said that clearing up the issue of possible military dimensions to Iran's nuclear program was "in the first instance" the IAEA's task.
"The more that Iran can do to meet their obligations with the IAEA, the better for the nuclear negotiating process around a comprehensive agreement," the U.S. official said on February 17. But, "We don't want to do the job that belongs to the IAEA."
By Reuters
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