The New York Times quotes European and American officials in reporting that inspectors detected traces of uranium in Iran that had been processed to a purity reserved for nuclear weapons: 90 percent of the rare 235 isotope.
It has not been reported before that uranium enriched to that degree was in Iran.
The Times report came Thursday as delegates at a key U.N. atomic agency meeting debated how harshly to censure Iran for failing to fully expose its nuclear activities and dispel suspicions it wanted to make weapons.
Amid closed meetings on the language of an Iran resolution, European diplomats said they were hopeful the final version adopted by the board of governors of the International Atomic Energy Agency would be less critical than a draft submitted by the United States and Germany, Britain and France.
A U.S. official said even that draft was not as tough as what the Americans had hoped for.
"It is a compromise," said the U.S. official, who spoke to The Associated Press on condition of anonymity. "But it deplores Iran's behavior, and it notes with serious concern that what Iran said … did not amount to the correct and full picture of their past and present nuclear program."
Some European officials said, however, that the compromise did not go far enough.
"We think the Americans are putting a lot of pressure on Europe," said a European diplomat, suggesting the final language in the Iran resolution would be further toned down.
"Our intention is to make things a little milder," said the diplomat, also speaking on condition of anonymity.
Organizers said that the next full session of the conference would likely be postponed until Friday to give delegates time to meet informally and shape a resolution all can agree on.
The United States, which insists the Islamic Republic has a nuclear arms program, has held up the example of Libya as a nation whose openness has reaped international rewards.
The board of governors on Wednesday unanimously adopted a resolution noting Libya's past attempts to make nuclear weapons but praising it for volunteering to scrap them and carrying through on its pledge. Libya also signed an agreement Wednesday opening up its nuclear activities to pervasive IAEA perusal.
"A country that truly comes clean with the agency and truly cooperates … gets a constructive response," U.S. delegate Kenneth Brill said. "Countries that seek to avoid providing the kind of cooperation that Libya has continue to be the subjects of intensified … scrutiny."
Iran asserts its nuclear programs are peaceful and has promised to cooperate with IAEA inspectors. But new finds by IAEA inspectors of undeclared items and programs have cast doubt on Tehran's assertions that it has no more nuclear secrets.
The United States, along with Canada and Australia, wants strong condemnation of Iran. But the Europeans and nonaligned nations at the meeting seek to focus more on Tehran's cooperation with the IAEA, even though that began only after last year's discovery that Tehran had plans to enrich uranium and had secretly conducted other tests with possible weapons applications.
An IAEA report last month accused Tehran of hiding evidence of nuclear experiments and noted the discovery of traces of radioactive polonium, which can be used in nuclear weapons. The report also expressed concern about the discovery of a previously undisclosed advanced P-2 centrifuge system for processing uranium.
Iran asserts its now suspended enrichment plans are geared only toward generating power. But on Wednesday, Iran announced plans to resume enrichment, eliciting a negative response from Mohamed ElBaradei, the IAEA chief, who said it would hurt Tehran's chances of proving that it has no interest in nuclear weapons.
"I think suspension is … a good confidence-building measure, and Iran needs to do everything possible right now to create the confidence required," ElBaradei told reporters.
Ahead of debate on the Iran draft resolution, Iran's chief delegate said U.S. failures in Iraq are prompting Washington to seek revenge against his country.
"We have never been involved in any nuclear weapons program … and the Americans don't want to accept the fact," Pirouz Hosseini told reporters. "The Americans have failed in Iraq, and it seems that it will be very difficult for them to accept a second failure."
Iran claims the equipment on which the traces of highly enriched uranium were found were contaminated in another country, then shipped to Iran.
If the enrichment was done in Iran, it means Iran is much closer to producing a bomb than previously though, The Times reports.
However, U.S. officials tell the newspaper that the origin of the enriched material matters little: Whether the enrichment was done in Iran or elsewhere, the equipment on which the traces were found is obviously capable of weapons-grade refinement.
Natural uranium consists mainly of two types of molecules — isotopes U-235 and U-238. The first, U-235, is what's used in nuclear fission, but makes up only about 0.7 percent of natural uranium.
When fuel is needed for power plants or material is needed for bombs, uranium is enriched by taking natural uranium and processing it to increase the amount of U-235 it contains. The typical enrichments process coverts uranium into a gaseous form and uses rotors to spin the gas, separating the lighter U-235 isotope from the heavier U-238.
The gas containing U-235 is then converted into fuel or bomb material.
Fuel for power plants is usually enriched to contain 5 percent of U-235. Weapons used uranium enriched to 90 percent or more.