Russia, which built Iran's first nuclear power station, said on Thursday it might help the Islamic Republic construct more atomic plants - dangling a carrot in front of Tehran amid tense diplomacy over its nuclear program.

Oil-producing Iran finally plugged the $1 billion Bushehr nuclear power station into its national grid in September, 19 years after Russia first agreed to build the 1,000-megawatt plant.

Moscow has periodically said it might build more reactors for Iran, which has ambitious plans for atomic power and an active nuclear program that the United States and its allies ear is aimed at developing weapons. Iran denies it.

The statement by the head of Russia's state nuclear corporation came as Moscow hosted a senior Iranian official and pleased Tehran by pouring scorn on a UN. nuclear agency report that deepened Western suspicions about Tehran's intentions.

"We are working on it, we have a corresponding assignment," Rosatom chief Sergei Kiriyenko told Prime Minister Vladimir Putin at a meeting of Russia's inner cabinet.

"As the construction of atomic energy reactors does not provoke doubts among the international community and is not in any way related to sensitive questions, it is fully possible," Kiriyenko said.

Started by Germany's Siemens in the 1970s but frozen because of the Iran's 1979 Islamic Revolution, construction at Bushehr was taken over by Russian engineers in the 1990s.

The United States and allies opposed the project for years, saying it could help Iran develop atomic weapons, but an agreement requiring Iran to return spent fuel that could be used for that purpose eased those concerns.

Russia is part of a group, with the United States, China, Britain, France and Germany, urging Iran to be more transparent about its nuclear program.

But Russia has been softer on Iran than the United States and the European Union, and has worked with China to water down previous UN Security Council sanctions.

Russia is calling for a step-by-step process in which existing sanctions would be eased in return for actions by Iran to dispel the concerns it could be seeking nuclear weapons.

By raising the possibility of helping to build new reactors, Russia may be seeking to persuade Iran to embrace its proposal, or at least to revive stalled talks with the six powers.

Ali Baqeri, deputy secretary of Iran's Supreme National Security Council, said in Moscow on Thursday that Iran had agreed to discuss the step-by-step plan with Russia "more deeply" and in more detail.

But Baqeri avoided comment on what initial steps could be taken under the Russian proposal and gave no indication that Iran was ready for any conciliatory measures.

He said the report by the UN's nuclear watchdog was baseless, politically motivated and might have been an attempt to undermine Moscow's proposal to "remove constructive solutions from the agenda."

"In the IAEA [the UN's International Atomic Energy Agency] report there is no window for the resolution of questions, no flexibility and no goodwill," Baqeri told a news conference, speaking through an interpreter.

He said Iran intended to build nuclear power plants providing 20,000 megawatts of electricity within 20 years.