By Fredrik Dahl
VIENNA (Reuters) - Signs that a U.N. watchdog investigation into suspected atomic bomb research by Iran is making little progress could further complicate broader diplomatic efforts to end the decade-old nuclear dispute that resume in Vienna this week.
The International Atomic Energy Agency indicated after a three-hour meeting with Iran on Monday that more work was needed
to fully implement a series of nuclear transparency measures by Tehran by a Thursday deadline. Iran says it has already done so.
The IAEA also made clear that no agreement had yet been reached with Iran on what issues to tackle in the next phase of a cooperation pact aimed at allaying fears that the country may have been seeking to develop a nuclear weapons capability.
The outcome is likely to disappoint Western diplomats, who want Iran to move much faster in addressing the IAEA's questions about alleged activities in the past that could be relevant for any bid to build a nuclear missile. Iran denies any such work.
"Everybody is fairly frustrated at the lack of progress," said one Western envoy familiar with the Iran nuclear file.
The meeting took place before a new round of negotiations between Iran and six world powers, also in the Austrian capital, aimed at reaching a final accord to settle the standoff over Tehran's nuclear ambitions by late July.
Iran's talks with the IAEA and with the powers are closely linked as both focus on fears that Iran may be covertly seeking a nuclear weapons capability. Iran says its uranium enrichment program is a peaceful energy project only.
Western diplomats say Iran must start engaging with the IAEA's long-stalled investigation and that this is central to the success of the broader negotiations.
Iran has offered to work with the IAEA in clarifying what the U.N. agency calls the possible military dimensions (PMD) of the country's nuclear program. But diplomats and experts say it would be difficult for Iran to admit to any past activity contradicting its denials of accusations of a bomb agenda.
"Iran has real problems in addressing the PMD issues," said the Western diplomat, who is not from one of the six major powers negotiating with Iran - the United States, France, Germany, Britain, China and Russia.
There was no immediate comment from Tehran.
Iranian Foreign Minister Mohammad Javad Zarif and European Union foreign policy chief Catherine Ashton - who leads talks with Iran on behalf of the powers - were to meet for dinner on Tuesday, ahead of formal negotiations set to run until Friday.
WEST AND IRAN FAR APART
Under the cooperation agreement signed with the IAEA in November, Iran was to take seven practical measures by May 15 in a phased process to shed more light on its atomic activities.
Diplomatic sources told Reuters last Friday that the IAEA was seeking further clarification from Iran about the most sensitive of those steps, concerning fast-acting detonators that can have both military and civilian applications.
How Iran responds to questions about its development and need of this type of equipment is seen as an important test of its willingness to cooperate fully with the IAEA investigation.
Iran says it has already implemented the seven steps - including access to two uranium sites - but the sources said the IAEA still wanted more information about so-called Explosive Bridge Wire (EBW) detonators.
They said the IAEA also wanted to agree with Iran new measures to be taken after May 15, hoping these will address other sensitive issues linked to its nuclear bomb inquiry.
However, after Monday's apparently inconclusive meeting, the two sides did not even say when they would meet again.
Iran wants an end to sanctions that are badly hurting its oil-reliant economy. After years of a vitriolic and confrontational standoff with the West, the election last year of pragmatist Hassan Rouhani as Iran's president created a new atmosphere more conducive to settling disputes via diplomacy.
But diplomats and experts say Iran and the West remain far apart on what a long-term deal to resolve the dispute and dispel fears of a new Middle East war might look line.
"It's typical for negotiations to experience bumps, blocks and breakdowns," Mark Fitzpatrick of the International Institute for Strategic Studies (IISS) think-tank said.
In the Iran-IAEA talks, "the Iranian negotiators have to be wary of appearing to be too cooperative, lest they be accused back home of giving in," Fitzpatrick said.
(Editing by Andrew Heavens)