Iran is continuing to enrich uranium, a process potentially used to make an atom bomb, but has slowed down the expansion of its enrichment activities, the UN''s atomic watchdog said Thursday.

"Contrary to the decisions of the (United Nations) Security Council, Iran has not suspended its enrichment related activities," the International Atomic Energy Agency wrote in its latest report on Tehran''s contested nuclear drive.

Enriched uranium is used to make both nuclear fuel and the fissile material for an atom bomb.

But a senior official close to the agency said that Iran''s expansion of its enrichment plant in Natanz had slowed "considerably."

"As we''ve seen, the pace has slowed down considerably since the time of the last report," the official said. "They haven''t given any reason or explanation for that."

According to the IAEA''s report, there are 3,964 centrifuges actively enriching uranium in Natanz, just 164 more than in November.

On top of those, a further 1,476 centrifuges were undergoing vacuum or dry run tests without nuclear material and an additional 125 had been installed but remained stationary.

In all, IAEA inspectors had been able to verify that Iran has accumulated 839 kilogrammes of low-enriched uranium. And Iran had told the IAEA that it had added another 171 kilogrammes this month.

Estimates vary, but analysts calculate that anywhere between 1,000-1,700 kilogrammes would be needed to convert into high-enriched uranium suitable for one bomb.