By Louis Charbonneau
VIENNA (Reuters) - Iran has started building a research reactor that could eventually produce enough plutonium for one bomb per year, ignoring calls to scrap the project, diplomats close to the United Nations said on Thursday.
"Iran has laid the foundations for the research reactor at Arak," a Western diplomat close to the U.N. International Atomic Energy Agency (IAEA) told Reuters on condition of anonymity.
In September, the IAEA board of governors passed a resolution calling on Iran "as a further confidence-building measure, voluntarily to reconsider its decision to start construction of a research reactor modified by heavy water."
Heavy-water reactors can be used to produce significant amounts of bomb-grade plutonium, which can then be extracted from the spent fuel.
Diplomats on the IAEA's 35-member board, as well as diplomats close to the IAEA, said they learned the foundations had been laid from photos taken by a commercial satellite.
The United States and other countries critical of Iran have questioned the need for this reactor, which is expected to be ready the end of this decade at the earliest.
"Iran has provided changing and contradictory rationales to the IAEA for this project, which would be well suited for plutonium production," the head of the U.S. delegation to the IAEA meeting, Jackie Sanders, told the IAEA board on Wednesday.
Iranian officials were not available for comment.
IAEA deputy director general Pierre Goldschmidt said earlier this week that Iran planned to proceed with the 40-megawatt heavy water research reactor project but gave no details. This size reactor could yield enough plutonium for approximately one bomb per year, diplomats and nuclear experts say.
Washington accuses Iran of developing nuclear weapons under cover of a civilian atomic energy program. Tehran denies this, insisting its nuclear ambitions are confined to the peaceful generation of electricity.
The European Union also suspects Iran is developing the capability to produce atomic arms but hopes a French, British and German offer of incentives will persuade Iran to abandon any such plans.
IAEA BOARD BACKS EU INITIATIVE
Separately, the 35 nations on the IAEA's board of governors urged Iran on Thursday to step up cooperation with U.N. inspectors and backed the EU's offer of incentives if Tehran ends all sensitive nuclear work.
Earlier this week, IAEA chief Mohamed ElBaradei said Iran had created a "confidence deficit" by concealing parts of its atomic program for nearly two decades and urged Tehran to improve its transparency and cooperation with U.N. inspectors.
A concluding statement from this week's IAEA governing board meeting said the 35 members unanimously said it was "essential that Iran provide full transparency and extend proactive cooperation to the agency."
The conclusion also said: "Support was expressed for the negotiations currently being undertaken between Iran, France, Germany and the UK ... and (the board) expressed the hope that an agreement would be reached on long-term arrangements."
The EU's "big three" states have offered Iran a package of economic and political incentives if it abandons its uranium enrichment program, which could produce fuel for nuclear power plants or atomic weapons. Tehran has temporarily frozen most of the program but has refused to abandon it.
The United States has so far refused to join forces with the EU, but is now considering whether to actively back the European offer of incentives to Tehran -- a move that European diplomats say would significantly boost the EU3 negotiating position.
(Additional reporting by Parisa Hafezi in Tehran)
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