Despite apparently reducing illicit purchases that breach United Nations sanctions, Iran is pursuing development of ballistic missiles, according to a confidential UN report.
News of the report comes as six world powers are negotiating with Tehran in Vienna to rein in its nuclear program.
The high-stakes negotiations aim for a deal by a July 20 deadline to end a long stand-off that has raised the risk of a wider Middle East war.
Tehran's often repeated view that missiles should not be part of the nuclear talks appears to enjoy the support of Russia, one of the six global powers.
But a senior United States official made clear this week that Tehran's ballistic capabilities must be addressed in the negotiations, since UN Security Council resolutions on Iran say that " any missile capable of delivering a nuclear weapon must be dealt with."
A ban on developing missiles suited to carrying a nuclear warhead is included in a 2010 Security Council resolution, its fourth - and toughest - imposed on the Islamic Republic for defying council demands that it suspend uranium enrichment and other nuclear activities of potential use in bomb-making.
Earlier this week, Iranian Supreme Leader Ayatollah Ali Khamenei described as "stupid and idiotic" Western expectations that his country would curb its missile development. He decreed mass production of ballistic weapons, striking a defiant tone just before nuclear talks resumed on Wednesday in Vienna.
The new report by the UN Panel of Experts, which was seen by Reuters, said Iran's overall attempts to illicitly procure materials for its banned nuclear and missile programs appear to have slowed down as it pursues negotiations with the world powers.
But the same report makes clear that, apart from holding off on test-firing one type of rocket, Iran shows no sign of putting the brakes on the expansion of its missile program.
"Iran is continuing development of its ballistic missile and space programmes," the experts said.
The dispute over missiles has already surfaced behind closed doors in Vienna. On Wednesday, the first day of the latest round of the nuclear talks, the U.S. delegation made clear that it wanted to discuss both Iran's ballistic missile program and possible military dimensions of its past nuclear research.
But in a sign of the wide divergence between the U.S. and Iranian positions, Iranian Foreign Minister Mohammad Javad Zarif merely laughed and ignored the remarks, according to an Iranian official present. An American official declined to comment but referred to remarks from a senior U.S. official earlier this week, who said "every issue" must be resolved.
Diplomats close to the talks say Britain, France and Germany agree with the U.S. view. But Russia, which has engaged in missile-technology trade with Iran, appears to disagree. Russian Foreign Minister Sergei Lavrov was quoted by Iranian media as saying that Tehran's missile program was not on the agenda.
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