The Vienna-based watchdog says Iran is using a second set of 164 centrifuges linked in a cascade, or string of machines, to enrich uranium to up to 20 percent at its Natanz pilot fuel enrichment plant. Another cascade there has been producing uranium enriched to near 20 percent since February.
IAEA spokeswoman Gill Tudor says that when inspectors visited the facility on July 17, Iran was "feeding nuclear material to the two interconnected 164-machine centrifuge cascades" in violation of U.N. resolutions.
She said Monday that Iran had informed the IAEA in March of its intentions to link the two cascades.
At 20 percent, uranium can be turned into weapons-grade material much more quickly than less-enriched uranium. Tehran denies it has such aims and says its nuclear activities are for peaceful purposes only.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
BERLIN (AP) — Iranian officials fear the country's international trade will suffer from the latest round of sanctions over its disputed nuclear program, a German lawmaker said Monday after visiting Tehran.
A top Iranian adviser, meanwhile, said the Americans "must be dreaming" if they think they can intimidate Tehran into giving that program up.
Rainer Stinner, a foreign policy specialist with Germany's Free Democrats — junior partners in the coalition government of Chancellor Angela Merkel — told The Associated Press Iranian lawmakers and government representatives he met last week in Teheran fear the sanctions will lead to decreased imports and exports.
Iranians "suppose that these sanctions could have a significant impact on import and export," he told the AP in a telephone interview from New Delhi.
The new U.N. resolution seeks to crack down on the problem of evading sanctions and established a group of experts to gather information and analyze countries' efforts to implement them.
The EU, and U.S. have also increased measures that seek to punish Iran for rejecting proposals to halt uranium enrichment and take its nuclear fuel from abroad. The West and its allies fear Iran could be on the path toward nuclear weapons. Iran says it only seeks nuclear power for energy and medical research.
Stinner — one of few western lawmakers to visit the country recently — was criticized by Iranian exile groups in Germany for his trip, which they argue effectively undermines the sanctions.
Kazem Moussavi, the leader of the Green Party of Iran in Germany, said the lawmaker's visit only served Tehran.
"The regime is exploiting every trip by a western diplomat for its own means," Moussavi said.
Stinner, a party ally of German Foreign Minister Guido Westerwelle, said his main goal was to get a better understanding of the Iranians and to discuss their possible inclusion in a regional strategy for Afghanistan.
"We can't fix the problem in Afghanistan if we don't include the regional powers," he said.
The Iranians have a vital interest in stabilizing their eastern neighbor, especially the problem of Afghan refugees and the flow of illicit drugs across their common border, Stinner said.
"Iran has no interest in seeing Afghanistan explode," he said.
After a week of talks on issues that included human rights, Israel and the nuclear dispute, Stinner said his impression was that the complex power structure between the supreme leader Ayatollah Ali Khamenei, President Mahmoud Ahmadinajad, parliament and the revolutionary guards is causing political divisions between these groups in Tehran.
"There are conflicts. There are diverging opinions. Also, the president is being criticized," Stinner said, although he declined to name critics or provide further detail, citing the confidentiality of the talks.
Meanwhile, an adviser to Iran's supreme leader, Ali Akbar Velayati, rejected the idea of Tehran giving up its nuclear program, insisting American threats will not deter Iran. He spoke during a trip to Syria.
The chairman of the U.S. Joint Chiefs of Staff said last week the U.S. military has a plan to attack Iran, although he thinks a military strike is probably a bad idea. Still, Adm. Mike Mullen said the risk of Iran developing a nuclear weapon is unacceptable.
Associated Press writer Albert Aji contributed to this report from Damascus, Syria.