Iran has tripled its monthly production of higher-grade enriched uranium and the UN nuclear watchdog has "serious concerns" about possible military dimensions to Tehran's atomic activities, the agency's chief said on Monday.

Yukiya Amano, director general of the International Atomic Energy Agency, also told the IAEA's 35-nation board of governors about the lack of progress in two rounds of talks between the Vienna-based UN agency and Tehran this year.

U.S. President Barack Obama and Israeli Prime Minister Benjamin Netanyahu were to meet shortly in Washington to discuss Iran, deeply at odds over the timing for possible last-resort military action against Iran's nuclear program.

Even though Obama offered assurances of stiffened U.S. resolve against Iran before the White House meeting, the two allies remained far apart over explicit nuclear "red lines" that Tehran should not be allowed to cross.

Iran denies suspicions that it is covertly seeking nuclear weapons capability, in part by coordinating efforts to process uranium, test high explosives and revamp a ballistic missile cone to accommodate a nuclear warhead.

But its refusal to curb sensitive atomic work that can have both civilian and military applications has drawn increasingly tough UN and Western sanctions against the major oil producer.

During the meetings in the Iranian capital in January and February, Iranian officials stonewalled the IAEA's requests for access to a military site seen as central to its investigation into the nature of the Islamic state's nuclear activity.

"The agency continues to have serious concerns regarding possible military dimensions to Iran's nuclear program," Amano told the closed-door meeting, according to a copy of his speech.

The IAEA "is unable to provide credible assurance about the absence of undeclared nuclear material and activities in Iran, and therefore to conclude that all nuclear material in Iran is in peaceful activities," he added.

A report by the IAEA to member states last month said Iran was significantly stepping up uranium enrichment, a finding that sent oil prices higher on fears that tensions between Tehran and the West could boil over into military conflict.

Since the IAEA's previous report in November, Amano said Iran has tripled monthly production of uranium refined to a fissile concentration of 20 percent - well above the level usually needed to run nuclear power plants.

Though indicated by the IAEA's confidential report last month, it was the first time Amano spoke in public about this rapid increase in Iran's enrichment activities, which has stoked Western and Israeli suspicions about Tehran's nuclear agenda.

The Islamic Republic says the more highly refined uranium will replenish the dwindling special fuel stocks of a Tehran reactor that produces medicinal isotopes.
But 20 percent enrichment, experts say, also represents most of the technical effort needed to attain the 90 percent threshold required for nuclear explosions.

Much of this work is carried out deep inside a mountain at Iran's underground Fordow facility to better shield it against military strikes, and further expansion is planned.

Despite intensive discussions with Iran, Amano said, there had been no agreement on a "structured approach" to resolve outstanding issues with its nuclear program during the talks held in January and February.

Iran "did not address the agency's concerns in a substantive manner," Amano said.
Making clear, however, that he would keep trying to engage Iran on the issue, he added: "Regarding future steps, the agency will continue to address the Iran nuclear issue through dialogue and in a constructive spirit.