Russia began shipping the shell of a nuclear reactor to Iran on Friday under a deal that has enraged Washington. Moscow signed a $1 billion contract with Tehran to build a nuclear power station at Bushehr in 1995, but the project was slow to get off the ground, in part because of intense U.S. pressure on Russia to renege on the deal.

Iran features on Washington's list of "rogue states" that sponsor terrorism, and it has urged Moscow not to transfer nuclear technology to Tehran.

Russia has repeatedly said the contract was for civilian use and complied with its international obligations.

But U.S. State Department spokesman Philip Reeker on Friday repeated allegations that the plant has military applications.

"We believe that Iran uses Bushehr as a cover for obtaining sensitive technologies to advance its nuclear weapons programme. We think Iran's clandestine effort to acquire weapons-grade material and related production capabilities poses a threat," he told reporters in Washington.

A train carrying the body of the reactor shell rolled out of the Izhorskiye Zavody plant in St. Petersburg and was loaded onto a ship bound for Iran, the office of St. Petersburg governor Vladimir Yakovlev said.

Russian television showed a crowd of workers burst into cheering and applause as the train left the factory. It said the Bushehr order was the company's biggest in 10 years.

Experts from the plant will travel to Iran to help install the reactor shell, which is due to arrive in Bushehr in a month.

Itar-Tass news agency quoted an Atomic Energy Ministry official as saying the reactor was due for completion by the end of 2003.

Russia has blamed "technical difficulties" for delays to the contract. Iran's President Mohammad Khatami visited Izhorskiye Zavody in March to monitor progress.

Moscow has received a tentative order from Tehran for another reactor, also to be built at Bushehr, and detailed negotiations are due to start in December.

Officials have said Moscow is considering a separate order for a twin-reactor power station in another part of Iran.

Washington has warned Russia it could be hit by sanctions over its nuclear cooperation with Iran.

That threat could pour cold water on Russia-U.S. ties that have warmed considerably since Moscow backed President Bush's "war on terrorism" after the Sept. 11 hijack attacks on U.S. landmarks.