The Iranian shift was detected by IAEA inspectors last week after months in which Iran accelerated the installation of centrifuge machines that refine uranium.

The United States, Britain, France, Germany, Russia and China are considering a third painful batch of UN sanctions. Iran has condemned the first two imposed since December over its refusal to halt enrichment, insisting its programme aims only at generating electricity.

IAEA director Mohamed ElBaradei said agency inspectors who just revisited Iran's vast underground enrichment plant at Natanz also noticed a "fairly slow" pace of feeding uranium into the centrifuges for enrichment.

He said the slowdown was a step in the right direction and he likened it to an Iranian pledge to him last month to start producing answers to IAEA investigations meant to verify whether its programme is wholly peaceful or military in nature.

ElBaradei has warned Western leaders that their insistence on zero nuclear activity in Iran may no longer be politically realistic due to its rapid progress in launching centrifuges.

He suggested only a compromise, perhaps capping Iranian enrichment work at its current low and closely-monitored level, and not more sanctions, would resolve the crisis peacefully.