As the International Atomic Energy Agency wrapped up talks on technical cooperation, the issue of the Iraqi rector was forwarded for consideration at a plenary session of the IAEA's 35-nation board of governors that opens Thursday.

The board is expected to approve a list of aid projects for the coming year, but to drop the item requesting safety expertise for the heavy-water reactor Iran is building at Arak, 200 kilometres (120 miles) south of Tehran.

"We expect that the board will approve the technical cooperation program with the exception of Arak," a Western diplomat said.

Another Western diplomat described this as an "important success" that had stopped Iran, which is facing the threat of UN sanctions over its nuclear ambitions, from creating division on the IAEA board in Vienna.

But Iranian ambassador Ali Asghar Soltanieh had complained Tuesday that a strictly technical matter was being politicised.

Soltanieh told the IAEA 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."

But a diplomat from a non-aligned state said: "A compromise has been struck."

The technical session of the board, which opened Monday, was marked by sharp differences.

The United States and other Western states argued that Iran, suspected of seeking nuclear weapons, had no right to aid for a reactor the IAEA has asked it in several resolutions to "reconsider" building.

But non-aligned countries, led by Cuba, said the aid should be approved as the IAEA has certified that the cooperation project for the heavy-water reactor at Arak is not a proliferation risk.

The non-aligneds also invoked the principle of the transfer of peaceful nuclear technology to developing countries.

"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 United States and the European Union, as well as Australia and Canada, are ready to accept a package of 832 aid projects, including seven less controversial programs for Iran, but have balked at help for the Arak reactor.

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

Schulte said the IAEA secretariat has assured Washington that it will monitor the remaining projects in Iran to ensure they "will not further Iran's efforts to develop enrichment, reprocessing or heavy water projects," such as providing training that could be used for such sensitive nuclear fuel work.

A Western diplomat said that the IAEA board would avoid a divisive vote, adopting the aid package minus Arak by consensus.

The ultimate fate of the Arak project proposal was not clear, apparently left vague in an effort to avoid more debate.

A Western diplomat said Iran would have to wait two years to bring up the Arak project again, as a last-minute effort by non-aligned countries to keep the issue pending was not accepted.

But other diplomats said the Arak project had merely been deferred and could be brought up before the board sooner.

In any case, Western states have pledged to avoid incendiary rhetoric at Thursday's board meeting as part of the compromise deal, a diplomat said.

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