Iran is making significant progress in expanding its nuclear programme, including in opening up a potential second route to developing the bomb, a new UN atomic agency report showed Wednesday.

The International Atomic Energy Agency's latest quarterly update said Tehran had accelerated the installation of advanced uranium enrichment equipment at its central Natanz plant.

It also outlined further progress at a reactor under construction at Arak, also in central Iran, which Western countries fear could provide Iran with plutonium if the fuel is reprocessed.

The US State Department said the report was an "unfortunate milestone" marking a decade of Iran expanding its nuclear activities "in blatant violation of its international obligations". A US congressional panel backed tougher sanctions against Iran.

Highly enriched uranium and plutonium can both be used in a nuclear weapon. North Korea used plutonium in two tests in 2006 and 2009, while uranium was used in the "Little Boy" atomic bomb dropped by the US on Hiroshima, Japan in 1945.

The new IAEA report, seen by AFP, said Iran has installed at Natanz almost 700 IR-2m centrifuges and/or empty centrifuge casings, compared with just 180 in February. None was operating, however.

Iran has said it intends to install around 3,000 of the new centrifuges at Natanz -- where around 13,500 of the older models are in place -- enabling it to speed up the enrichment of uranium.

The UN Security Council has passed numerous resolutions calling on Iran to suspend all enrichment and heavy water activities of the kind under development at Arak. It has imposed four rounds of sanctions.

Last year additional unilateral US and EU sanctions targeting Iran's oil exports and its financial system began to cause real problems for the Persian Gulf country's economy.

Israel, the Middle East's sole if undeclared nuclear-armed state, has refused to rule out military action against Iran, as has US President Barack Obama. Iran says that its atomic activities are peaceful.

Diplomatic efforts to resolve the impasse, most recently in six-power talks with Iran in Kazakhstan in April, have failed to make concrete progress.

Despite developments at Natanz, the IAEA report noted that Iran has not started operating any new equipment at its Fordo facility, built under a mountain near the holy city of Qom.

Fordo is of more concern to the international community, since it is used to enrich uranium to fissile purities of 20 percent and Natanz mostly to five percent, technically much closer to the 90-percent level needed for a bomb.

The IAEA report showed that Iran has produced so far 324 kilos (714 pounds) of 20-percent enriched uranium, 44 kilos more than three months ago, but that 140.8 kilos have been diverted to fuel production, up from 111 kilos.

Experts say that around 240-250 kilos are needed for one bomb.

At the research reactor under construction at Arak, which Iran says will start operating in the third quarter of 2014, the IAEA said that the plant's large reactor vessel had been received but not yet installed.

The same was true of a number of other major components, it added.

Iran had not provided the IAEA with "urgently required" updated design information for the IR-40 reactor at Arak since 2006, the IAEA added.

"This is important because the reactor could be used to produce enough weapons grade plutonium for one weapon a year," Mark Fitzpatrick, analyst at the International Institute for Strategic Studies, told AFP.

The IAEA is also pressing Iran to provide access to documents, sites and scientists involved in what it suspects were research activities, mostly in the past but possibly ongoing, towards developing the bomb.

At one of these sites, the Parchin military base near Tehran, the new IAEA report said that in addition to months of activity levelling the area that the agency wants to inspect, Iran has now covering a "significant proportion" with asphalt.

"I don't think they are doing themselves any favours," one senior official familiar with the probe said, adding that some rubble from the site had been dumped in lakes.

In the US Congress Wednesday, the House Foreign Affairs Committee passed the Nuclear Iran Prevention Act, which would extend sanctions against Iran to the auto and mining sectors and foreign currency reserves.

The new law, should it pass the House and Senate and be signed by President Barack Obama, would require further reduction of one million barrels per day over the next year, amounting to a virtual embargo on Iran's crude exports.