Ties between the IAEA and Iran have been good until now

A report by the International Atomic Energy Agency (IAEA) says Tehran has broken an agreement to report proscribed nuclear activities - but adds that it is taking steps to rectify this.

The report was released to news agencies on Friday ahead of a meeting of the IAEA's board of governors on the issue later this month.

Iran, which the United States has described as part of an "axis of evil", denied it was breaking any agreements and said it could answer every point made in the report.

The number of failures by Iran to report the material, facilities and activities in question in a timely manner... is a matter of concern IAEA report

"We have done nothing which would violate our commitments regarding the NPT [Nuclear Non-Proliferation Treaty]," said foreign ministry spokesman Hamid Reza Assefi.

"We have answers for all the points mentioned in this news."

Iran insists it wants to use nuclear energy only for peaceful purposes and denies allegations that it is developing nuclear weapons.

It has so far refused to sign agreements that would allow tougher international inspections of its nuclear facilities.

'Minor'

The IAEA report accuses Iran of failing to meet its obligations to:

• account for nuclear material

• report its subsequent processing and use

• declare facilities where the material is stored and processed

The report notes that the quantities of nuclear material involved have "not been large" but says that Iran's failures to report back were a "matter of concern".

Atomic ambitions First nuclear plant comes online by summer 2004 Has signed up to the Nuclear Weapons Non-Proliferation Treaty Can now supply its own power stations with nuclear fuel

Last Sunday, Russia - Iran's main partner in its nuclear power programme - added its voice to those calling on Tehran to sign an additional protocol to the NPT.

That would permit tougher international inspections, giving the Iranians a chance to prove they are not trying to produce nuclear weapons.

But Iran refused to agree to this, before international sanctions are lifted and the country is given the technology to develop atomic energy for peaceful purposes.