VIENNA - The United Nations nuclear watchdog's board of governors Thursday indefinitely blocked an Iranian bid for technical aid for a reactor project due to fears it could yield bomb-grade plutonium, a diplomat in the meeting said.

But the decision, which the International Atomic Energy Agency's board adopted by consensus after days of wrangling between industrialized and developing nations, left open the possibility of revisiting Iran's request in future.

In a compromise hammered out in negotiations ahead of the board meeting, Iranian requests for IAEA technical assistance on seven other nuclear energy projects judged not to pose a risk of being diverted to bomb-making were approved by the governors.

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Iran said on Thursday just before the announcement that it would like the aid but would press ahead even if its request was to be rejected.

"If they help us, we will appreciate it. If not, we will do it by ourselves," Foreign Minister Manouchehr Mottaki told reporters shortly before a diplomat in Vienna said the IAEA had indefinitely blocked Iran's request.

A text accepted by the board in a consensus decision said all requests for IAEA technical aid submitted by member countries were approved "with the exception of" Arak, said a senior diplomat who was in the closed meeting.

That formulation allowed countries from opposite sides of the issue to claim victory, with the United States and its allies saying it constituted denial, and developing countries who traditionally support Iran interpreting it as deferral.

Gregory L. Schulte, the chief U.S. delegate to the IAEA said Arak was "removed entirely from the program, not just deferred,"adding: "Never has Iran been so isolated."

The U.S. and the IAEA are not prepared to help countries build nuclear bombs," he told reporters.

But a senior diplomat from a developing country - who asked for anonymity in exchange for commenting on the issue - said the project "is in no way denied, because it can come up again in two years."

The full board decision was taken after review of a summary of a board
committee on the more than 800 aid requests to the agency - including Arak and others from Iran.

That summary noted that "several members expressed the need for caution
regarding technical cooperation with the Islamic Republic of Iran." They
"expressed particular concern" over Arak, saying they could not approve other Iranian projects being submitted if aid for the reactor were approved, the summary said.

The full board also reviewed a report on the latest stage of a nearly
four-year IAEA investigation into Iran's nuclear activities.

That report essentially says that the agency has been unable to make headway in determining whether suspicions that Tehran is interested in making nuclear weapons are well founded.

Touching on Iranian foot-dragging IAEA chief Mohamed ElBaradei said his
inspectors had "not been able to make any progress" in their investigation.

"This is essentially due to the decision by Iran to limit its cooperation," he said. "The IAEA is therefore unable to move forward in its efforts to confirm the absence of undeclared nuclear material and activities in Iran. This, naturally continues to be a matter of serious concern."

Still, the Arak dispute was the main focus of the meeting. While the argument was over technicalities, it reflected the charged atmosphere.

Technical aid requests are normally approved without discussion - but since the first committee meeting on Monday, suspicions that Iran might be seeking to make nuclear weapons led to diplomatic tussling on what to do about the request on Arak, which will produce enough plutonium for two bombs a year, once completed within the next decade.

Past IAEA resolutions have urged Iran to stop building the Arak reactor, which Iran says it needs to produce radioactive isotopes for medical purposes.

Developing countries - the key recipients of IAEA technical help - are worried that denial of aid for any project would set a precedent that would hurt their future chances of getting agency support.

Arak is one of seven or eight projects submitted by Iran - lists circulated at the meeting have conflicting numbers. Most, if not all, of the 35 nations had no trouble with approving Iran's request for help with the other far less contentious projects, said the diplomats.

Rebuffing Iran's Arak request would not affect its construction and would also have no effect on the country's other potential avenue to weapons production - uranium enrichment.

Still, it would maintain at least symbolic pressure while the U.N. Security Council is deadlocked over how to sanction Iran for ignoring demands to stop enriching uranium.