Tehran/Paris: US President Barack Obama and his French counterpart, Nicolas Sarkozy, on Saturday again warned Iran not to pursue the development of nuclear weapons.

"Iran's possession of nuclear weapons would be profoundly dangerous... for the entire world," Obama said after meeting with Sarkozy.

Other countries in the Middle East would then be moved to develop nuclear weapons as well, Obama warned, adding: "We can't afford a nuclear arms race in the Middle East."

"The United States and France are together on this issue," Sarkozy said. "We do not want nuclear proliferation."

Iran said on Saturday a new report from the United Nations nuclear watchdog showed Tehran's nuclear programme was peaceful, despite Western suspicions it is aimed at making atomic bombs.

Friday's report said Iran had significantly expanded uranium enrichment with almost 5,000 centrifuges now operating and this had made it harder for UN inspectors to keep track of the disputed nuclear activity.

The International Atomic Energy Agency (IAEA) report said Iran had increased its rate of production of low-enriched uranium, boosting its stockpile by 500 kilos to 1,339 kilos.

David Albright of the Institute for Science and International Security said Iran now had accumulated enough uranium to convert it into high-enriched uranium sufficient for one atomic bomb.

"Iran could accomplish nuclear weapons 'breakout capability' within three to six months," he said. "They haven't made a political decision to do that. Whether they [will] is unknown."