The UN atomic agency on Thursday shelved Iran's request for technical help in building a nuclear reactor that the United States fears could provide plutonium for weapons.
The decision of the International Atomic Energy Agency's (IAEA) 35-nation board of governors came after three days of divisive meetings on technical cooperation that ended with a compromise between Western and developing states.
In another development, IAEA chief Mohamed ElBaradei said limited cooperation by Iran had blocked the agency from making "further progress" on clearing up questions about Tehran's nuclear programme, which Washington suspects of hiding weapons development.
But ElBaradei said Iran had recently made "steps in the right direction," by agreeing to let IAEA inspectors take environmental sample swipes on equipment from a former military site at Lavizan and granting access to operating records at a uranium enrichment plant in Natanz.
The IAEA had requested these steps for months, as Iran pushed ahead with uranium enrichment in defiance of a UN call for it to suspend the sensitive nuclear work.
The agency's governing board blocked technical cooperation for the heavy-water reactor Iran is building in Arak, 200 kilometres south of Tehran, by dropping the proposal from a list of some 800 aid projects it approved on Thursday for the coming two years, an IAEA spokeswoman said.
US ambassador Gregory Schulte insisted that the deletion of the Iranian request was permanent.