Diplomat confirms Iran nuclear upgrade with new, advanced centrifuges for uranium enrichment set for installation VIENNA A senior diplomat confirmed to the Associated Press on Thursday that Tehran had started upgrading its nuclear program. He said U.N. officials just back from Iran saw new machines positioned to vastly accelerate output of material usable both for reactor fuel and nuclear warheads. The diplomat said the officials saw a small number of advanced centrifuges for enriching uranium at the Natanz plant southeast of Tehran. His comments followed Iran's announcement the day before. But while Iran said installation had begun, the diplomat said the officials only saw machines positioned for installation Wednesday. The machines are much faster than ones now enriching. Iran says it only wants reactor fuel but the centrifuges can also produce fissile warhead material. The diplomat demanded anonymity because his information was confidential. The announcement came hours after senior officials of the U.N. atomic agency, the IAEA, returned from Tehran without a hoped-for deal that would have led to the resumption of a probe into allegations that Iran worked secretly on nuclear arms. Herman Naeckerts, who headed the International Atomic Energy Agency team, said "remaining differences" between the two sides meant "we ... could not finalize" the agreement on how such an investigation should be conducted. He declined to say whether there was progress. Iran insists it is only enriching uranium to power reactors and for scientific and medical purposes. Due to its nuclear secrecy, however, many countries fear that Iran may break out from its present production, which is below the weapons-grade threshold, and start enriching to levels over 90 percent -- producing the material needed to arm nuclear weapons. Iran's Vice President Fereidoun Abbasi told the official IRNA news agency on Wednesday Iran would use the new machines to produce 5 percent level enriched uranium. At a separate facility known as Fordo, southwest of Tehran, Iran has close to 3,000 centrifuges producing material enriched to 20 percent, which could be turned into weapons-grade uranium much more quickly. Fitzpatrick said the fear is that the new machines "will enable them to very quickly turn it (the 20 percent-enriched stockpile) into high enriched uranium."