VIENNA (Reuters), Feb. 24 - Iran has sharply stepped up its controversial uranium enrichment drive, a United Nations watchdog report showed on Friday, a defiant move certain to further fuel Western alarm about the Islamic Republic's atomic aims.
The International Atomic Energy Agency (IAEA), in a confidential document, also reported its failed mission to Tehran this week to try and get Iran to respond to allegations of research relevant for the development of nuclear weapons.
The setback increased worries about a downward spiral towards conflict between Iran and the West, and sent oil prices higher.
"The Agency continues to have serious concerns regarding possible military dimensions to Iran's nuclear program," the Vienna-based U.N. body said in its latest quarterly report about Iran's atomic activities.
The IAEA report to member states showed Iran had carried out a significant expansion of activities at its main enrichment plant near the central city of Natanz, and also increased work at the Fordow underground facility.
Enriched uranium can be used to fuel nuclear power plants, which is Iran's stated aim, or provide material for bombs if refined much further, which the West suspects is Tehran's ultimate aim.
At Natanz, the IAEA report said 52 cascades - each containing around 170 centrifuges - were now operating, up from 37 in November.
At Fordow, almost 700 centrifuges are now refining uranium to a fissile concentration of 20 percent and preparations are under way to install many more, the IAEA report showed.
Fordow is of particular concern for the West and Israel as Iran is shifting the most sensitive aspect of its nuclear work, refining uranium to a level that takes it significantly closer to potential bomb material, to the site.
Estimated to be buried beneath 80 meters (265 feet) of rock and soil, it gives Iran better protection against any Israeli or U.S. military strikes.
Israeli Defense Minister Ehud Barak has warned that the Islamic state's nuclear research could soon pass into what he called a "zone of immunity," protected from outside disruption.
The IAEA report showed Iran had now produced nearly 110 kg of uranium enriched to 20 percent since early 2010. Western experts say about 250 kg is needed for a nuclear weapon.