The development has been rejected by the European Union which earlier this month negotiated what was supposed to be a halt in all of Iran's uranium enrichment activities.

Iranian and British, French and German officials met until late in the evening in an effort to resolve the last-minute hitch.

The International Atomic Energy Agency (IAEA) will decide at the meeting which opens Thursday, and could last until next week, whether to bring Iran before the UN Security Council for possible sanctions, sought by the United States for what it says is a covert nuclear weapons program.

IAEA chief Mohamed ElBaradei is to report on the suspension Thursday.

But the IAEA's 35-nation board of governors is first Thursday to consider the case of South Korea, which has conducted uranium and plutonium-making activities that violated international nuclear safeguards on a wider scale than Seoul had previously declared, according to an agency report earlier this month.

But the IAEA said the tests were experimental and small-scale, and that South Korea had cooperated with the agency in investigating the matter.

Diplomats said it was unlikely the IAEA would refer South Korea to the UN Security Council, even though the United States would like to see this happen as a matter of principle, in order to not set a precedent for Iran not to be brought to the Council.

"There will be a toughly worded chairman's statement (rather than a board resolution) that will not refer South Korea to the Security Council," a Western diplomat close to the IAEA said.

South Korea had in August admitted to the IAEA that its scientists had conducted secret experiments in separating plutonium in the 1980s.

Seoul also reported laser enrichment of uranium "in 2000 by scientists at the Korea Atomic Energy Research Institute (KAERI) in Daejeon" that refined uranium to an average level of 10.2 percent and up to the highly enriched level 77 percent, which is close to weapons-grade, according to the report.

On Iran, a diplomat close to the IAEA said the Iranians "are trying to convince the IAEA to leave several dozen of the centrifuges unsealed for RD (research and development) purposes in addition to other equipment which has direct use for enrichment."

A Western diplomat said it would be "outrageous" if Iran at the last minute exempted some centrifuges, the machines used in enriching uranium.

"It is not acceptable to us," a European diplomat said.

Under the terms of a deal hammered out with Britain, France and Germany, Tehran was to suspend all uranium enrichment activities from last Monday, a move which is now being verified by the IAEA.

Iran had continued to produce the uranium gas that is the feedstuff for enriching uranium only days before Monday's ban, a move one European diplomat characterized as "not very helpful" as it led to doubts about Iran's intentions and the future of the suspension deal.

Enriched uranium, made by spinning uranium gas in what can be cascades of thousands of centrifuges, can serve as fuel for nuclear reactors or as the raw explosive material for atomic bombs.

The IAEA board will Thursday hear a European draft resolution based on the suspension agreement and which finally won US backing, but an Iranian failure to fully suspend enrichment could force drastic revisions.

Diplomats said Washington had taken a pragmatic decision to support the European draft, even though it falls short of demanding possible UN sanctions for Iran.

The United States has for over a year been trying to get the IAEA board to take Iran before the Security Council, but non-aligned states, as well as the European trio and Russia and China, have opposed this, saying Iran must be given a chance to cooperate with a two-year-old IAEA investigation of its nuclear program.

Iran maintains its nuclear program is strictly peaceful.

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