The UN nuclear agency said the installation of equipment at the Fordo uranium plant was now complete, while reiterating its regular statement that it was "unable ... to conclude that all nuclear material in Iran is in peaceful activities".

The report said activities seen by satellite at the Parchin military base, where the IAEA says it has evidence of possible past nuclear weapons research work, meant that verification efforts there would be "seriously undermined".

Iran denies working or ever having worked on a nuclear weapon and says all its atomic activities are peaceful.

The report's findings are expected set off alarm bells in Israel and beyond.

Since the last report in August, Iran has installed some 640 new centrifuges at Fordo, but none of them have been put into operation yet.

Another 700 of the machines, which are used to enrich uranium gas by spinning it at supersonic speeds are ready for feeding according to the report.

Iran has not yet informed the Vienna-based agency whether it intends to use the new centrifuges to enrich uranium to 20 per cent - close to the level needed for a bomb - or to the less alarming level of around 5 per cent.

Many in the international community are worried that by the time Fordo is fully up and running, Iran will be producing far more 20 per cent-enriched uranium than Iran's civilian nuclear activities conceivably need.

The UN Security Council has passed six resolutions calling on Iran to suspend all enrichment, including to lower levels, passing four rounds of sanctions.