Head of Iran's Atomic Energy Organization Ali Akbar Salehi (L) and IAEA Director General Yukiya Amano pose together, Nov. 11, 2013. Photo by AP
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Iran has sharply reduced its most sensitive nuclear stockpile in implementing an interim pact with world powers and has begun engaging with a long-stalled IAEA investigation into suspected atom bomb research, the UN nuclear agency said on Friday.

According to a confidential report obtained by the Associated Press, Iran now has less than 40 kilograms (90 pounds) of higher-enriched uranium. That's about a fifth of what it would need to for a weapon.

The findings, in a quarterly report by the International Atomic Energy Agency, are likely to be welcomed by the six powers that are trying to negotiate a long-term deal with Iran on ending a decade-old dispute over its nuclear programme.

Iran rejects Western allegations that it has been trying to develop the capability to build nuclear weapons.

Meanwhile, the United States imposed sanctions on an Iranian official on Friday for allegedly putting limits on free speech in Iran, including cutting off mobile phone communications during political demonstrations in 2012.

The U.S. Treasury Department, which announced the sanctions, did not link the action to negotiations over Iran's nuclear program.

Iran and six world powers, including the United States, face a July 20 deadline on their talks. U.S. and Iranian officials said last week there has been little progress made.

On Friday, the Treasury said Washington was sanctioning Morteza Tamaddon, who it identified as the current head of the Tehran Provincial Public Security Council.

Tamaddon was involved in harassing Iranian opposition politicians following the country's 2009 election and also publicly threatened protesters in 2012, the Treasury said.

It said any U.S. assets held by Tamaddon would be frozen and Americans would be prohibited from doing business with him.