"The United States and Europe have clearly moved away from uranium conversion to set enrichment as the new red line but it's not clear if Russia, the key diplomatic player at this point, buys this," Mark Fitzpatrick, a non-proliferation expert at London's International Institute for Strategic Studies (IISS) think tank, said.

Conversion is the first step in enriching uranium into what can be fuel for nuclear power reactors but also the raw material for nuclear bombs.

The UN nuclear watchdog International Atomic Energy Agency (IAEA) on Thursday put off taking Iran to the UN Security Council to give time for new Russian diplomacy.

Talks on a Russian proposal to allow Iran to conduct uranium enrichment -- but in Russia and not in Iran in order to keep Tehran from obtaining nuclear technology crucial to making atom bombs -- will now take center stage.

The IAEA's 35-nation board of governors had in September found Iran in non-compliance with the nuclear Non-Proliferation Treaty (NPT), a finding that requires eventual referral to the Security Council for possible international sanctions.

It also called on Iran to halt conversion work it had resumed in August and which torpedoed EU-Iran talks on guaranteeing that Iran will not make nuclear weapons.

But the Russian proposal is based on Iran being allowed to convert uranium ore into the gas that is the feedstock for enrichment.

So the conversion that in September was the cut-off point for taking Iran to the Security Council has now become accepted as something Iran could retain in an eventual compromise solution, diplomats admitted.

German ambassador Herbert Honsowitz indicated the new red line when he told the IAEA board Thursday that the concern over unilateral nuclear moves by Iran was "particularly true regarding threats to start enrichment. It must be absolutely clear that this would immediately put an end to our efforts" for a compromise.

Iran however stubbornly defends its "right" to enrich uranium, as stipulated in the NPT.

Iran's IAEA ambassador Mohammad Akhundzadeh told Iranian media Friday: "Like all member countries in the International Atomic Energy Agency, the Islamic Republic of Iran has the right to enrich uranium," he said.

Diplomats in Vienna told AFP they had seen a four-page intelligence document that claims to report a meeting on October 24 at which the secretary of Iran's Supreme National Security Council Ali Larijani discussed options for possibly resuming enrichment at Iran's Natanz facility, where there is already a cascade of 164 centrifuges. The report could not be independently confirmed.

Fitzpatrick said the Iranians had succeeded in advancing their nuclear program while dealing with the IAEA "by taking the minimal half-step to prevent being sent to the docket in New York."

He said he now wondered about "salami slicing tactics" the Iranians might use, such as holding off from running the cascade in Natanz but testing, for instance, some 20 centrifuges there which are not under IAEA seals, as is the cascade, but only television surveillance.

The Iranian goal would be for enrichment to become a fait accompli, as was done for conversion.

In any case, a diplomat close to the IAEA said that even if Iran moved ahead with enrichment, it would not be enough to get non-aligned states and countries like Russia, which defend Iran's right to peaceful nuclear technology, to favor Security Council referral.

"Even enrichment would not do that because in terms of legality Iran is not denied the right to do this," the diplomat, who is from a non-aligned country, said.

The NPT, which empowers the IAEA in its verification work, guarantees signatories the right to the peaceful use of nuclear energy, including enrichment.

The European Union and the United States claim however that Iran is using its civilian nuclear program as a cover for secret development of nuclear weapons.

They say Iran should be kept from obtaining the "breakout capability" to make nuclear weapons which enrichment represents.

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