Citing unnamed Brazilian officials and diplomats in Vienna, the newspaper said the International Atomic Energy Agency and Brazil were at an impasse over the inspections.

Brazil maintains that the facility in Resende will produce low-enriched uranium for use in power plants, not the highly enriched material used in nuclear weapons, according to the report.

Nonetheless, Brazil refuses to let IAEA inspectors see equipment in the plant, citing a need to protect proprietary information, the paper said.

In a statement, the Brazilian Foreign Ministry said the issue was "a technical matter between Brazil and the International Atomic Energy Agency," and noted it had previously been discussed in the international news media over the past two months.

The Post said the diplomatic standoff plays into fears that a new type of nuclear race is underway, marked not by the bold pursuit of atomic weapons but by the quiet and lawful development of sophisticated technology for nuclear energy production, which can be quickly converted into a weapons program.

Brazil's project also poses a conundrum for US President George W. Bush, who has called for tighter restrictions on enrichment of uranium as part of a new strategy to prevent the spread of nuclear weapons, the report said.

Nonproliferation specialists say that if the United States and the United Nations do not act to curtail Brazil's program, or at least insist on inspections, it could undermine White House calls for Iran and North Korea to halt their efforts to enrich uranium, according to The Post.

Brazil's science and technology minister Eduardo Campos said the "insinuation" made by The Post was "unacceptable."

"The Brazilian nuclear project is intended exclusively for peaceful purposes. What is more, that is how our constitution defines it. We are also signatories of the nuclear weapons non-proliferation treaty," Campos said.

In October 2003, Brazil announced that as of mid-2004, it would start producing industrially enriched uranium to feed its two nuclear power plants.

The minister at the time, Roberto Amaral, described the move as a major step forward for his country to reach autonomy in uranium production, underlining Brazil's commitment to peaceful purposes for the substance.

The plant in Resende belongs to a program considered legal under international treaties, but it remains subject to UN inspections aimed at making sure it is not used for producing weapons-grade material.

According to The Post, the IAEA has sent inspectors to Resende in recent months, only to find significant portions of the facility and its contents shielded from view.

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