Tehran:  The head of the UN nuclear watchdog holds talks in Iran on Thursday on UN demands for a halt to uranium enrichment, discussions overshadowed by Tehran's plan to raise enrichment to an industrial scale.

The visit by International Atomic Energy Agency (IAEA) chief Mohammad Al Baradei comes less than 48 hours after Iran declared it had enriched uranium to a level used in nuclear power stations and would press ahead with large-scale production.

Al Baradei said on Wednesday upon arrival in Tehran that he hoped to persuade Iran to suspend its uranium enrichment activities.

"We hope to convince Iran to take confidence-building measures including suspension of uranium enrichment activities until outstanding issues are clarified," he told journalists at the Tehran airport.

"I would like to see Iran has come to terms with the request of the international community."

Tuesday's announcement by a triumphant President Mahmoud Ahmadinejad drew stinging rebukes from world powers, including Russia and China, while the United States said the UN. Security Council, which could impose sanctions, must take "strong steps".

The IAEA chief is expected to meet top Iranian officials, but the diplomat said he was not expected to broker a deal.

An Iranian official said Al Baradei would meet Ali Larijani, secretary of Iran's Supreme National Security Council, and Gholamreza Aghazadeh, head of Iran's Atomic Energy Organisation.

"They have obviously achieved a significant advance at the research and development level and want to present it as a fait accompli to strengthen their bargaining position with the West," the diplomat added.

Iranian analysts echoed that view, saying Iran's nuclear enrichment capability could strengthen the country's hand.

The Security Council has told Iran to halt all sensitive atomic activities and on March 29 it asked the IAEA to report on its compliance in 30 days, prompting Al Baradei's one-day visit.

Diplomats at the Security Council said the five permanent council members plus Germany would meet in Moscow next week alongside a Group of Eight meeting to discuss Iran.

The diplomats said the council was unlikely to take any substantive action until Al lBaradei had made his report at the end of April.

The IAEA diplomat said Al Baradei would be briefed by IAEA inspectors on their findings at Iranian nuclear sites in the past few days, including their assessment of Iran's claim to have enriched uranium by 3.5 per cent.

The level of enrichment needed for nuclear bombs is far higher than 3.5 per cent and experts say it would take Iran two decades to produce enough highly enriched uranium for one bomb from its current cascade of 164 centrifuges.

But Tehran says it wants to install 3,000 centrifuges, which experts say could produce material for a warhead in one year.