"Fortunately the current IAEA report has been more positive than the earlier ones due to the new approach of the Islamic republic," the head of Iran′s nuclear energy organisation Ali Akbar Salehi was quoted by state television′s news website as saying.

The International Atomic Energy Agency said on Friday in a study obtained by AFP that Iran has slowed production of enriched uranium and agreed to tighter monitoring of its enrichment plant.

Tehran has also granted UN inspectors access to a research reactor long out of bounds, the restricted report revealed.

Enriched uranium can be used to make nuclear fuel, but can also become the fissile material for an atomic bomb.

Iran is suspected of trying to develop atomic weapons under the guise of a civilian nuclear programme, a charge Tehran strongly denies.

The IAEA estimates that Iran has so far amassed 1,508 kilogrammes of low-enriched uranium hexafluoride (UF6), up from 1,339 kilogrammes in June.

Estimates vary, but analysts calculate that anywhere between 1,000-1,700 kilogrammes of low-enriched uranium would be needed to convert it into highly-enriched uranium suitable to make a single atomic bomb.

"This report mentions that Iran has not halted its uranium enrichment which we consider to be our right," said Salehi, who is also an Iranian vice president.

"Nowadays the IAEA′s inspectors comprehensively and constantly visit our nuclear facilities; there are even resident inspectors in Iran and nothing is covered for the IAEA," he added.

IAEA inspectors said that while Iran is still installing uranium-enriching centrifuges at Natanz, the number of machines in use has been reduced.

A total of 4,592 centrifuges were actively enriching uranium, compared with 4,920 at the time of the IAEA′s last report in June. However, the number of machines installed had been increased by around 1,000 to 8,308.

France, Germany and the United States have spoken in favour of an international energy embargo on Iran, which has a shortage of refining capacity despite being rich in oil.

"Referring Iran′s nuclear case to the United Nations is illegal and lacks legal foundations," Salehi said.

"The US is angry since it made a baseless claim about Iran but the IAEA did not accept it to include it as a document in its report," Salehi added, referring to alleged weaponisation studies.

These "studies" refer to documents collected from a wide range of intelligence sources that appear to suggest Iran might have been trying to develop a nuclear warhead, convert uranium and test high explosives and a missile re-entry vehicle.

Iran has repeatedly dismissed the allegations as "baseless" and the evidence used to back up the charges as "fabricated."

Washington said that despite the report, Tehran was still not fully cooperating with the IAEA, and a State Department spokesman downplayed the new access granted to inspectors.

"Based on what we have seen, it seems clear that Iran continues to not cooperate fully and continues its enrichment activities," Ian Kelly said.

"They say that they want to have the right to a civilian nuclear energy programme but they also have the obligation to show the world that that is indeed what they intend to do," he added.

The IAEA said Iran was still stone-walling agency questions regarding alleged weaponisation studies carried out in the past.

"Regrettably, the agency has not been able to engage in any substantive discussions about these outstanding issues for over a year," the report said, stressing it was "critical ... for Iran to clarify the outstanding issues."

Iran′s refusal to halt uranium enrichment flies in the face of repeated UN Security Council calls as well three sets of sanctions.

For its part, Iran arch-enemy Israel said Tehran was engaging in a cover-up.

Its agreement to more monitoring was "smoke in the international community′s eyes aimed at covering up, not shedding light," the foreign ministry said.