A plenary session of the International Atomic Energy Agency's 35-nation board of governors was cancelled Thursday morning to give diplomats time to review amendments to a resolution proposed by the IAEA's 13 non-alignednations.

A NAM diplomat said his group, which met with the Iranian IAEA representative Wednesday, wanted to "soften the tone" to avoid coming down too hard on Iran, and alienating the Islamic Republic from cooperating with the

A non-NAM diplomat close to the talks said the NAM grouping wanted to eliminate two parts which Iran had been particularly sensitive about -- mention of Iran using military-related sites for its centrifuge program to enrich uranium and a call for Iran to suspend all activities related to enriching uranium.

Malaysian ambassador to the IAEA Gulam Haniff, spokesman for the NAM group here, said the non-aligneds had thought it was "not necessary to have a resolution on Iran."

He said this was because the board had already set the "framework" for working with Iran at a meeting in Vienna in November, when it criticized Iran for 18 years of hiding nuclear secrets but praised it for now cooperating.

The IAEA has since February 2003 been verifying whether Iran's nuclear program is peaceful, or devoted to secretly developing atomic weapons, as the United States has charged.

IAEA chief Mohamed ElBaradei said at the board meeting that began in Vienna Monday that Iran has failed to report possibly weapon-related nuclear activities, such as the possession designs for sophisticated P-2 centrifuges to make enriched uranium.

New revelations keep coming. The New York Times reported Thursday that IAEA inspectors have found traces of extremely highly enriched uranium (HEU) in Iran, of a purity reserved for use in a nuclear bomb.

Citing European and American diplomats, the Times said "among traces that inspectors detected last year are some refined to 90 percent of the rare 235 isotope."

The IAEA had in February reported finding traces of HEU enriched to 35 percent.

The Iranians claim this is from contaminated imported equipment, some of which may have come from Pakistan which has nuclear weapons and thus would have uranium enriched to extremely high levels, experts said.

IAEA officials have told AFP they have not yet determined whether the enriched uranium found in Iran was made by the Iranians, came from contaminated equipment or as seems most likely came from HEU bought by the Iranians on the nuclear black market.

The draft resolution presented by Canada and Australia, and backed by the United States, already has won support from 18 of the 35 board members.

The United States and western European countries had Tuesday reached a compromise on the text.

The United States, Canada and Australia had been pushing for a tough statement but Britain, France and Germany wanted a milder draft in order to keep Iran cooperating with the IAEA.

The so-called Euro 3 had in October struck a deal with Iran to cooperate with the IAEA, and are stressing the path of "constructive engagement", a Western diplomat said.

The compromise draft, a copy of which was obtained by AFP, condemns Iran for failing to report its possession of such crucial technologies as the advanced P-2 centrifuge designs.

But it puts off any immediate reaction, such as citing Iran for non-compliance with the nuclear Non-Proliferation Treaty (NPT), a move that would take the issue to the UN Security Council for possible sanctions.

Iran Wednesday blasted the Euro 3 for bowing to US pressure and threatened to cut cooperation with the IAEA.

But US ambassador to the IAEA Kenneth Brill told reporters the IAEA had identified "significant concerns" about Iran's program.

"We look forward to the agency getting complete cooperation from Iran so that it can truly get to the bottom of the Iranian nuclear program," Brill said.

WAR.WIRE