WASHINGTON: A UN report shows Iran doubling down on its nuclear work, upping its enrichment of uranium closer to weapon-grade even as the United States considers re-starting talks with the Islamic Republic. This does not bode well for a breakthrough towards ending the crisis caused by fears Iran seeks the bomb.

The UN watchdog International Atomic Energy Agency issued a report in Vienna Friday which showed Iran enriching uranium to a level closer to weapon-grade at a new site, in clear defiance of an international drive to get Iran to rein in its nuclear ambitions.

The enrichment up to 20 percent is taking place not just at Iran’s main plant, in Natanz, but at a new plant at Fordow, which is built under a mountain. Israel has expressed concerns this site could be impregnable against a bombing attack from the air and thus put Iran in a so-called zone of immunity against military action.

The IAEA report said that between Dec. 14 last year and the last agency monitoring on Feb. 17, Iran had produced 13.8 kilograms at Fordow. It has been producing this more highly enriched uranium since February 2010 in Natanz and has a total of 109.2 kilograms of uranium enriched up to 20 percent, three times what they had last November.

Iran says it is making this uranium since it needs fuel for a research reactor in Tehran which makes isotopes for medical diagnosis. But the United States claims Iran is getting closer to having the capability to build a nuclear weapon.

Uranium enriched up to 5 percent is used for power reactors while weapon-grade uranium is over 90 percent enriched. Enrichment is not a straight-line process, more of a curved exponential one, which means that 20 percent enrichment is already some 80 percent of the way to weapon-grade.

The IAEA report comes after agency inspectors failed in two visits to Iran over the past month to get answers about alleged nuclear weapons work. Iran says its program is a peaceful effort to generate power and carry out other civilian applications, but the IAEA had published an extensive report in November about possible military dimensions to Iran’s nuclear activity. IAEA inspectors particularly want to visit a military testing site called Parchin, where there is a steel container where explosives testing on building the trigger for an atomic bomb may have taken place. Iran has refused access to Parchin and said the documents the IAEA has alleging atomic weaponization research are forged.

The IAEA said: “Iran did not provide access to Parchin, as requested by the agency during its two recent visits to Tehran, and no agreement was reached with Iran on a structured approach to resolving all outstanding issues in connection with Iran’s nuclear programme.”

Iran’s confrontation with the United States and its allies had escalated after the November report. The United States and the European Union moved to impose sanctions that would cut into Iran’s oil sales, its economic lifeblood. Iran responded by threatening to close the Strait of Hormuz, through which a third of the world’s sea-borne oil passes, and even, in the words of one senior military officer, to carry out a pre-emptive strike against the nations threatening it. Meanwhile, there has been increasing speculation about the possibility of an Israeli strike against Iran’s nuclear installations.

At the same time, however, the Islamic Republic has opened up a peace offensive, inviting the IAEA inspectors into the country for the two special visits and offering to hold new talks with the six major powers negotiating with it – Britain, China, France, Germany, Russia and the United States. A senior Western diplomat told reporters in Washington that failure to cooperate with the IAEA would not affect efforts to get new talks going between the so-called P5-plus-1 and Iran since this lack of cooperation was not new. But he said it was, just the same, a “bad start” towards having serious talks.

The significance of the new IAEA report lies in its detailing the extent of Iran’s nuclear ambitions, as it creates facts on the ground which will be harder to negotiate away. The IAEA said it “continues to have serious concerns regarding possible military dimensions to Iran’s nuclear programme.” Iran has effectively turned its enrichment program from an effort to produce uranium refined to 3.5 percent for the U-235 isotope used for chain reactions to one using the more than 5,000 kilograms of low-enriched uranium it has manufactured to produce 20 percent enriched uranium. The Islamic Republic is about 100 kilograms short of having enough 20 percent enriched uranium to be able to refine further to make a bomb.

Meanwhile, Iran is aggressively experimenting with more advanced centrifuges which could enrich uranium more quickly, something that would reduce the so-called break-out time needed to bump up enrichment to weapon-grade if Iran were to try to make a bomb secretly or by catching the world by surprise. These new centrifuges are called IR-2m, Ir-4, Ir-5 and Ir-6′s but they are all apparently variations on one model, one which probably uses carbon fiber instead of the high-strength aluminum for rotors in the IR-1 models which are doing the enriching now.

There may be an element of bluster to this. Iran has said it wants to set up production lines of the advanced centrifuges in Fordow but has not yet managed to enrich uranium with them at the research center in Natanz, according to the new report. It has laid down centrifuge casings and piping for 2,088 more centrifuges in Fordow but these, and the 696 already turning there, are for the IR-1 centrifuge, and not for the advanced models.

One important point is that Iran has started making fuel from the 20 percent enriched uranium for the Tehran Research Reactor, where the medical isotopes are made. This caught IAEA inspectors by surprise and may be a true technological achievement for Iran. But this is not yet clear, nor is it certain how safe the new fuel assemblies are.

One big remaining question is whether some 20 kilograms of uranium metal has disappeared and may have been diverted for military purposes. Said the report: “the discrepancy remains to be clarified.”

All this will make diplomacy, if and when the two sides sit down to talk, even more difficult. A Russian proposal for a step-by-step approach to resolving the crisis calls at first for Iran to limit enrichment, stopping work in Fordow in return for the lifting of travel restrictions on Iranian officials and scientists. It has three other steps which end with Iran suspending all enrichment for one to three months in return for the suspension of all sanctions against it and having Iran removed as a special subject of investigation from the United Nations agenda.

More modestly, a senior Western diplomat said a workable start would be for Iran just to talk seriously, something he said it did not do for “one second” in the last two meetings, in Geneva in December 2010 and in Istanbul in January 2011. Yet in light of Iran’s rejecting IAEA demands and aggressively expanding its nuclear work, even such a small first step seems like an enormously big one.