Iran has installed about 1,000 advanced uranium enrichment centrifuges and is set to test them, a UN nuclear report showed, a development likely to worry Western powers hoping for a change of course under the country's new president.

The International Atomic Energy Agency's quarterly report - the first since relative moderate Hassan Rouhani won Iran's June presidential election - also said the Islamic state had started making fuel assemblies for a reactor which the West fears could yield nuclear bomb material. Iran denies any such aim.

On the other hand, Iran's most sensitive nuclear stockpile has grown little - remaining below its arch-enemy Israel's stated "red line" that could provoke military action - since the previous IAEA report in May. This could buy time for more negotiations with six world powers.

The IAEA report showed Iran continuing to press ahead with its disputed nuclear programme at a time when the outside world is waiting to see if Rouhani will act to ease tension with the Islamic Republic's Western critics.

Envoys accredited to the IAEA had cautioned against reading too much into the latest inspectors' report as it mainly covered developments before Rouhani took office on Aug. 3, replacing the conservative hardliner Mahmoud Ahmadinejad.

Iran says its nuclear energy programme is for power generation and medical purposes only, rejecting Western allegations that it seeks the capability to make nuclear weapons.

New nuke talks on Sept 27

IAEA and Iran will hold a new round of talks on Sept. 27 over Tehran's disputed atomic programme, the first such meeting since relative moderate Hassan Rouhani took office as Iranian president.

The meeting will be held in Vienna, a spokeswoman for IAEA said. It would be the 11th round of discussions between the two sides since early 2012, so far without any result.

The talks will be scrutinised by the West for any sign of increased Iranian readiness to compromise in the decade-old international dispute over its nuclear programme after the June election of Rouhani. He has pledged more transparency and less confrontation in dealings with the IAEA and world powers.

Iran and the IAEA last met in May, without achieving a breakthrough that would allow the U.N. agency to resume a long-stalled investigation into what it calls the possible military dimensions to Iran's nuclear programme.

Western officials accuse Iran of stonewalling the IAEA's inquiry into suspected atomic bomb research. Iran says the allegations that it may have carried out tests relevant for developing atomic bombs are baseless and forged.

Rouhani replaced Mahmoud Ahmadinejad, a conservative hardliner under whom Iran's relations with the IAEA deteriorated. Tehran said on Monday it had named a disarmament expert as its new IAEA ambassador, extending a reshuffle of top officials dealing with the nuclear programme. – Reuters