By Isabelle Le Page

VIENNA, May 25, 2012 (AFP) - The UN atomic watchdog said Friday that it found traces of higher-grade uranium at a site in Iran, but that Tehran had said it may be down to a technical error, a day after crunch talks in Baghdad.

The agency's latest report, seen by AFP, also said that satellite imagery showed "extensive activity" at the Parchin military site, which it said could hamper efforts to probe claims of suspected nuclear weapons research there.

The International Atomic Energy Agency also revealed that its head, Yukiya Amano, wanted in a visit to Tehran on May 21 to "conclude" a deal on clarifying accusations of such research.

In the event Amano returned empty-handed, saying only that that he and Iran's chief nuclear negotiator Saeed Jalili made a "decision" to reach an agreement, and that he expected this to be signed "quite soon."

The agency report said that the traces found at the Fordo site, inside a mountain near Qom, were of uranium enriched to purities of 27 percent.

Iran has told the IAEA that the site was enriching only to 20 percent, which was already of concern to the watchdog since the capability to do so shortens the theoretical time needed to enrich to weapons-grade uranium of 90 percent.

"Iran indicated that the production of such particles 'above the target value' may happen for technical reasons beyond the operator's control," the report said.

"The agency is assessing Iran's explanation and has requested further details. On 5 May 2012, the agency took further environmental samples from the same location.... These samples are currently being analysed," it added.

The P5+1 powers -- the United States, Russia, China, Britain, France and Germany -- proposed in a meeting with Iran this week that Iran stop 20-percent enrichment and a suspension of all activities at Fordo, diplomats said.

Iran is however loath to do any such thing without the prospect that UN and unilateral sanctions imposed on the country in recent years -- more will hit on July 1 -- be eased.

The P5+1's proposals stopped short of this, offering instead a series of lesser incentives that state media reports in Iran indicated the country thought were woefully insufficient.

The two days of intense talks in Baghdad achieved very little other than agreeing to meet again in Moscow on June 18-19.

The IAEA report also said that new satellite imagery indicated "extensive activities" were taking place at buildings at the Parchin military site near Tehran which the IAEA says it would like to inspect but Tehran has denied it.

The IAEA said that "virtually no activity had been observed for a number of years" and that the apparent new work "could hamper the agency's ability to undertake effective verification."

Iran says Parchin is not a designated nuclear site and thus it is not obliged to permit IAEA inspections, although it last did so in 2005.

It says if it did allow inspections of the site, they would have to be part of an agreed "road map" that would address the IAEA's concerns in a set order.

Regarding Amano's sought-after accord with Iran, the IAEA report said "some differences remained" but that Jalili, who also represented Iran in Baghdad this week, "made clear that these were not obstacles to reaching agreement."

The Director General invites Iran to expedite final agreement ... and urges Iran to engage the agency on the substance of the issues as soon as possible, including by providing early access to the Parchin site," it said.

ilp-stu/co