The diplomats spoke on condition of anonymity as a key IAEA board meeting discussed how to react to Iran's nuclear activities. While Iran has acknowledged nearly two decades of concealment, it has recently begun cooperating with the agency in response to international pressure.
As part of that cooperation, it has suspended uranium enrichment — an activity that the United States had linked to what it says was Iran's nuclear weapons agenda. Iran insists it enriched uranium only to produce power.
While acknowledging that some of its enrichment equipment had traces of weapons-grade highly enriched uranium, it insists those traces were inadvertently imported on material it purchased abroad.
Iran has said it cannot identify the countries of origin because it bought the centrifuges and laser enrichment equipment through third parties.
The Vienna-based IAEA needs to establish where the equipment came from, however, to be able to compare isotope traces in its efforts to verify whether Iran is telling the truth about the source of the traces or whether it enriched uranium to nuclear weapons levels domestically.
The diplomats declined to say how the agency established the probable origin of the equipment. Reacting to earlier reports linking it to Iran's enrichment program, Pakistan has denied all involvement.
In recent interviews, IAEA Director-General Mohamed ElBaradei has said that five countries and companies in Asia and Europe are the source of the enrichment equipment.
The revelations came amid intense IAEA discussions on a "quite strong" resolution on Iran's past covert nuclear activities that also acknowledges its recent cooperation, ElBaradei said.
Opening a meeting of the agency's 35-nation board of governors, ElBaradei characterized Iran's recent cooperation as "very encouraging" and said inspectors were getting full access.
But ElBaradei said he expected the agency's board to address "the bad news and the good news" in a resolution being drafted to hold Tehran accountable for its past nuclear activities.
"The bad news is that there have been failures and breaches. The good news is that there has been a new chapter in cooperation," he said. "There is an intensive discussion right now on the draft resolution. The latest version being discussed is quite strong."
Still, the agency doesn't know if Iran has tried to build nuclear weapons. That, he told the board, "will take some time and much verification effort."
But he welcomed Tehran's recent cooperation with the agency.
"The situation has changed significantly since the middle of last month, when a new chapter of implementation of safeguards in Iran seems to have begun, a chapter that is characterized by active cooperation and openness on the part of Iran," he said in his speech to the closed-door meeting. A copy was made available to reporters.
The United States had hoped the IAEA board would find Tehran in noncompliance with the Nuclear Nonproliferation Treaty at its meeting. Diplomats described Thursday's talks as "very fluid," suggesting there was an effort to close the gap between the U.S. and European approaches on how to deal with Iran.
On Wednesday, Washington rejected a proposed European draft resolution that would urge Iran to continue cooperation with the agency but refrain from harshly condemning it for concealing parts of its nuclear program, saying it was prepared to opt for no resolution rather than a toothless one.
Drawn up by France, Germany and one of Washington's closest allies, Britain, the rough draft minimized nearly two decades of covert nuclear programs that the U.S. administration says point to an effort to develop nuclear weapons.
Instead, it focused on positive steps taken by Iran over the past few weeks to deflect international suspicions, including suspending uranium enrichment and agreeing to inspections on demand by IAEA inspectors.
A senior diplomat, who reported on the meeting on condition of anonymity, said the main point of discussion was "how to deal with Iran's past nuclear activities."
Whereas the initial European wording chastised Iran for "failure to fulfill its obligations," there was discussion late Wednesday of stronger language — either including past "noncompliance" of IAEA agreements on the part of Iran, or finding it in "breach of its obligations."
Both would be more acceptable to the United States and its allies, said the diplomat. He said the proposed language would likely be discussed between British Prime Minister Tony Blair and President Bush as well as between Secretary of State Colin Powell and German Foreign Minister Joschka Fischer.
Another senior Western diplomat said the draft would make clear that the board would not accept "repetition of past mistakes, deceit or tricks," and would urge Iran to immediately open its nuclear programs to pervasive inspections even before the agreement is ratified.
It also would ask Iran to maintain its commitment to suspending uranium enrichment — one of the activities that raised suspicions when discovered early this year.