Iran is finishing sensitive nuclear activities it started before the freeze began November 22. The process is going slowly due to mechanical problems, though it is expected to be finished by February, diplomats said.

Iran and the EU opened talks in Brussels on December 13 on giving Tehran trade, technology and security rewards in return for its freeze of uranium enrichment, which makes fuel for civilian nuclear reactors but also, in highly refined form, the explosive core of atomic bombs.

The United States is warily watching the freeze and the Iran-EU negotiations, as it charges that Iran is using the suspension to gain time to secretly develop nuclear weapons and has pushed for hauling Tehran before the UN Security Council for possible sanctions.

Making the powder, uranium tetrafluoride (UF4), is as far as Iran can go in enrichment, according to the agreement reached last month with EU negotiators Britain, France and Germany and endorsed by the UN watchdog International Atomic Energy Agency (IAEA).

UF4 is the precursor to UF6 gas that is fed into high-spinning centrifuges in order to filter out enriched uranium.

Iran was already processing 37 tons of the uranium ore known as yellowcake into UF4 when it struck the deal.

Iran is allowed to finish this at its uranium conversion plant in Isfahan, since it is otherwise difficult to clear the conversion machines, a diplomat told AFP.

The diplomat said there have apparently been "some technical problems with the plant" which have slowed down Iran's effort to finish processing the yellowcake.

"It may take weeks to finish this," a Western diplomat close to the IAEA said, adding that the last batch of UF4 is expected to be "spit out" by February 5.

The IAEA, which is monitoring Iran's enrichment suspension, had reported last month that Tehran indicated it would bring material at Isfahan into a "safe, secure and stable state not beyond UF4."

The IAEA has been investigating Iran's nuclear programme for almost two years but on November 29 adopted a toned-down resolution on the programme in return for the enrichment halt.

This came after Iran tried, and failed, to get 20 centrifuges exempted from the freeze for research purposes and after Iran processed UF4 into UF6 up until the start of the suspension on November 22.

A Western diplomat said Tuesday that the continuing UF4 processing was "foreseen and negotiated and is definitely not in violation of the agreement."

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