Officials from the UN atomic watchdog, the IAEA, visited Iran on Sunday to discuss Tehran's suspect nuclear drive, amid fury in the Islamic republic at a looming EU oil embargo.

The three-day International Atomic Energy Agency mission, which was to end Tuesday, was looking into information suggesting Iran's was researching nuclear weapons.

Foreign Minister Ali Akbar Salehi, quoted by the official IRNA news agency, said the six members of the IAEA delegation "are allowed to visit any of our nuclear sites that they request."

He told reporters in Addis Ababa, where he was attending an African Union summit, that he was "very optimistic" about the IAEA visit. He reiterated that "Iran is never, ever after nuclear weapons."

The visit was regarded as a rare opportunity to alleviate a building international showdown over Iran's nuclear programme marked by a ratcheting up of sanctions and talk of possible Israeli military action.

Herman Nackaerts, the IAEA's chief inspector leading the team, said before leaving Vienna that "we hope Iran will engage with us on the possible military dimensions of Iran's nuclear programme," adding that dialogue was "overdue".

Iran's parliamentary speaker, Ali Larijani, described the visit as a "test" for the UN agency.

If the IAEA officials were "professional," then "the path for cooperation will open up," he said, according to the website of the official IRIB state broadcaster.

"But if they deviate and become a tool (of the West), then the Islamic republic will be forced to reflect and consider a new framework" for cooperation, Larijani added.

Iran is increasingly furious at Western measures aimed at making it halt uranium enrichment.

It has defiantly stepped up enrichment at a new bomb-proof bunker in Fordo near the Shiite holy city of Qom.

And Salehi on Sunday reiterated Iran's plans to put a 20-percent enriched nuclear fuel plate into its Tehran research reactor within the next month -- a technical advance some Western countries believe is beyond Tehran's ability.

Iran has reacted fiercely to new sanctions targeting its oil and finance sectors, notably the European Union's announcement of a ban on all Iranian oil imports within the next five months.

While Iranian lawmakers on Sunday delayed taking action on a proposed bill to immediately cut oil exports to Europe in retaliation for the EU embargo, Iran's cabinet discussed the issue.

"Soon we will cut exports to some countries according to future plans of the oil ministry," Oil Minister Rostam Qasemi told reporters after the cabinet session, according to IRNA.

He did not specify which countries he meant, but stressed that Iran "will not face any problems" selling its oil to non-European countries.

Iran, OPEC's second-biggest producer, has repeatedly brandished threats to use oil as a weapon if it is backed up against the wall.

Officials have warned they could even close the Strait of Hormuz, a chokepoint at the entrance to the Gulf, in a move analysts say could send oil prices soaring by 50 percent.

Saudi Arabia has promised to make up for any shortfall should Iranian oil be curbed, but it too depends on the strait.

The United States, which has called any attempt to close the strait a "red line" not to be crossed, is reportedly planning to send a large floating base for commando teams to the Middle East.

It already has two aircraft carrier groups in and near the Gulf, and has broadened arms deals to Saudi Arabia and the United Arab Emirates.

Against that backdrop of threat and counter-threat, attention is focused on what the IAEA talks might yield.

IAEA chief Yukiya Amano on Friday reiterated the agency had "information that indicates that Iran has engaged in activities relevant to the development of a nuclear explosive device."

He called on Tehran to show "substantial cooperation."

IRNA reported the mission would go to the Fordo site, but there was no IAEA confirmation.

Iran has alleged IAEA bias and kept the watchdog at arm's length, even as it has pledged cooperation.

It has also signalled a willingness to resume talks with world powers that collapsed last year, but has yet to reply to a letter sent three months ago by EU foreign policy chief Catherine Ashton offering a return to negotiations.

Observers note that while Iran is feeling the impact of Western sanctions, it shows no sign of halting its nuclear activities.

"Sanctions have not eliminated Iran's capacity or desire to continue developing its nuclear programme," said Dina Esfandiary, analyst with the International Institute for Strategic Studies in London.