The United States and the European Union argue that Iran, suspected of seeking nuclear weapons and threatened with UN sanctions, has no right to technical aid for a reactor the International Atomic Energy Agency has asked it to "reconsider" building.

But the Western states have been unable to persuade non-aligned countries at an ongoing meeting on technical cooperation of the IAEA's 35-nation board of governors.

The non-aligneds, led by Cuba, say Iran should get the aid it has requested as the IAEA has certified the project is not a proliferation risk. They have also invoked the principle of the transfer of peaceful nuclear technology to developing countries.

The United States and the EU, as well as Australia and Canada, are ready to accept a package of 832 aid projects, including seven less controversial programs for Iran, but refuse to offer Tehran safety expertise in building the heavy-water reactor at Arak, 200 kilometres (120 miles) south of Tehran.

"The reactor, once completed, will be capable of producing plutonium for one or more nuclear weapons each year," said US ambassador to the IAEA Gregory Schulte.

Diplomats said the plan now was for the technical session to make no recommendation and for the matter to be taken up fresh when the governing board meets in a regular political session Thursday and Friday.

"G-77 nations (developing states) are saying that approving aid is a technical decision but that removing a project is a political decision," a Western diplomat said.

The board ended debate Tuesday unable to reach agreement and was to resume the technical discussions the following day.

"I think more time is needed," a senior EU diplomat told AFP.

While Russia and China have spoken in favor of approving the whole aid package, including the Arak reactor, they will eventually support the naysayers, a Western diplomat said.

Iran ambassador to the IAEA Ali Asghar Soltanieh on Tuesday blasted the holding up of aid to Arak -- which Iran is constructing in any case -- saying a strictly technical matter was being politicised.

Soltanieh told the board that countries funding the aid "have assumed the role of supervising, even interfering and imposing their politically motivated and discriminatory policies in the technical evaluation process."

He criticised states such as Canada and Australia for backing IAEA aid to Israel, which is not a signatory of the nuclear Non-Proliferation Treaty (NPT), but not to a signatory like Iran.

Diplomats said the compromise being hammered out was to defer a decision on Arak, rather than reject the idea of technical cooperation outright.

The Western powers have a majority on the board and would win a vote, but are working for a consensus decision, they said.

Finnish ambassador Kirsti Helena Kauppi had said Monday on behalf of the EU that Iran's request for IAEA funding was "not consistent" with the resolutions of the board of governors and the UN Security Council, which has threatened sanctions to get Tehran to rein in its nuclear program.

A Security Council resolution in July called on Iran to suspend making enriched uranium, which like plutonium can fuel civilian reactors but can be used in highly enriched form to make atom bombs.

Iran says it is building the Arak reactor to produce medical isotopes and to replace a smaller, ageing, light-water reactor in Tehran.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.