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UN report: Iran has neutralized half of its uranium stock closest to nuke-arms grade.

The U.N. nuclear agency says Iran has neutralized about four-fifths of its stockpile of higher-enriched uranium that could be turned quickly into the core of a nuclear weapon.

The agency says Iran now has less than 40 kilograms (90 pounds) of the material. That's about a fifth of what it would need to for a weapon.

The U.N's International Atomic Energy Agency reported the development Friday in a confidential report obtained by The Associated Press.

Iran denies any interest in having atomic arms. But it has agreed to some nuclear concessions in exchange for a partial lifting of the sanctions that are crippling its economy under a deal in effect since January.

Diluting and converting its 20-percent enriched stockpile were among the Iranian commitments under the agreement.