The head of the UN's atomic watchdog said yesterday Iran was still at the starting stage of creating a uranium enrichment plant and that concerns stemmed more from its motivations than the scale of production.

"There are various definitions of industrial scale production. Iran is still at the starting stage of creating a uranium enrichment plant," Mohamed Elbaradei, head of the International Atomic Energy Agency (IAEA), told reporters in Riyadh.

"The fears do not only stem from Iran conducting industrial production but rather Iran's aims behind (enriching uranium) before it has nuclear reactors for electric power generation that need enriched uranium."

Iran said on Monday it had begun industrial enrichment of uranium, a process the West fears the Islamic Republic is mastering so it can make atomic bombs.

Tehran insists its programme is peaceful and will only be used to generate electricity. Russia, Iran's closest big power ally, said on Tuesday it was "not aware of any technological breakthroughs" and diplomats who follow the nuclear issue have expressed doubts it had injected uranium gas feedstock into a batch of 3,000 centrifuges it is building.

Mr Baradei confirmed that IAEA inspectors were in Iran.

They began a routine visit this week to the Natanz facility where Iran carries out its enrichment work, an Iranian official has said, and could provide the first independent assessment of Iran's assertion.

"Since uranium is being enriched under the supervision of the IAEA, this means Iran cannot enrich uranium to the scale that would raise concerns on its use for weapons," Mr Elbaradei said.

A year ago, the IAEA confirmed that Iran had managed to enrich uranium for the first time in small quantities after a similarly high-profile assertion by Iranian President Mahmoud Ahmadinejad.

Iran could make enough material for an atomic bomb in a year with 3,000 centrifuges, if it wanted, but that would require the machines to be running without hitches, Western experts say.