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While Iran has taken steps that could ease concerns about its controversial uranium enrichment programme, it has started expanding a key nuclear site, according to a report by the International Atomic Energy Agency (IAEA) on Thursday.

The document was sent to member states shortly before the five permanent UN Security Council members and Germany are to restart talks with Iran in Kazakhstan on Tuesday, aiming to halt the enrichment programme in return for technical cooperation projects.

Iran has enriched an additional 47 kilograms of uranium to a purity level of 20 per cent since November, the IAEA said in its new report.

However, the Islamic republic has converted some of this material into fuel for a research reactor in Natanz, thus reducing the amount that could theoretically be used for a weapon, from 280 to 167 kilograms.

Iran's usable stockpile thus remained below the critical threshold of about 250 kilograms that is necessary to build one bomb.

Many countries are concerned about 20-per-cent material because it could be quickly turned into a nuclear weapon. Tehran has stressed that it has no such plans and that it only wants to develop its nuclear power and science capacities.

While Iran's step might go some way to accommodate fears about a growing uranium stockpile, the IAEA report also made clear that new, more efficient centrifuges are now being installed at the Natanz facility, allowing the country to turn out more enriched uranium at higher speeds in the future.

Iranian engineers have started installing 180 of these next-generation centrifuges and Iran has indicated to the IAEA that it plans to set up at total of about 3,000, a senior diplomat said in Vienna.

At the talks in Kazakhstan, the United States, Britain, France, Russia, China and Germany are aiming to get Tehran to stop enriching and to stop expanding sites such as Natanz, in return for cooperation on nuclear and aviation technology.

The French Foreign Ministry confirmed that the group of six would make a new negotiating offer to Iran, but Western diplomats have told

dpa that any improvement of incentives would be only "incremental," even if the update offer might include easing of some Western sanctions.

The White House refused to discuss details of what the group might offer, but said they were united in their approach and were ready for "serious and substantive" discussions.

"Iran has a choice. If it fails to address the concerns of the international community, it will face more pressure and become increasingly isolated," spokesman Jay Carney said. "The burden of sanctions could be eased, but the onus is on Iran to turn its stated readiness to negotiate into tangible action."

US State Department spokeswoman Victoria Nuland said the installation of advanced centrifuges would be a further escalation and another violation of Iran's obligations under UN Security Council resolutions and IAEA board resolutions.

"It would mark yet another provocative step," she said. "We've seen this before, that in advance of diplomatic rounds, there are new announcements of activity."

The IAEA report also made clear that nine rounds of talks between the nuclear agency and Iran have failed to open the path to inspections of the country's alleged nuclear weapons projects.

It reiterated that the IAEA has got information from several intelligence agencies "indicating that Iran has carried out activities that are relevant to the development of a nuclear explosive device."

IAEA chief inspector Herman Nackaerts said last week that there would be no further talks in the near future, after he came back from the latest fruitless round of negotiations in Tehran.

"(The IAEA needs) time to reflect on the way forward, and so do its member states," another senior diplomat said in Vienna, looking ahead to the next IAEA board meeting in March.

In Israel, Prime Minister Benjamin Netanyahu, who made preventing Iran from acquiring nuclear weapons a key policy of his last term, called the IAEA report "very grave."

His office said the report "proves that Iran is continuing to make rapid progress toward the red line" that Netanyahu described in his speech to the United Nations in September.

"Today, Iran is closer than ever to achieving enriched material for a nuclear bomb," it said, adding that "preventing Iran from attaining nuclear weapons is the first subject that ... Netanyahu will discuss with US President Barack Obama during the latter's expected visit in less than a month."

Meanwhile, the new IAEA report also said that Iran has again shut down its nuclear power plant at Bushehr, the second time this has happened since October.

At that time, Iranian officials denied there were technical problems at the country's only nuclear power plant, but Western diplomats said they were worried about the site's safety.

The IAEA did not give a reason for Bushehr's new outage.