* Watchdog's chief inspector still sees "lot of outstanding issues"
* Cites progress in talks so far
* Comments follow weekend agreement in Tehran talks
The U.N. nuclear watchdog signalled its determination on Monday to get to the bottom of suspicions that Iran may have worked on designing an atomic bomb, a day after Tehran agreed to start addressing the sensitive issue.
Chief U.N. nuclear inspector Tero Varjoranta said progress had been good during Feb. 8-9 talks in Tehran but that much work remained in clarifying concerns of possible military links to Iran's nuclear programme, in an investigation which Western diplomats say Tehran has stonewalled for years.
"There are still a lot of outstanding issues," Varjoranta, deputy director general of the International Atomic Energy Agency (IAEA), said at Vienna airport after returning from the Iranian capital. "We will address them all in due course."
Iran denies Western allegations it seeks the capability to make nuclear weapons, saying such claims are baseless and forged by its foes. Years of hostile rhetoric and confrontation have raised fears of a new war in the Middle East.
But a diplomatic push to resolve the decade-old dispute gained new momentum after last June's election of a relative moderate, Hassan Rouhani, as Iran's president on a platform to ease its international isolation.
Iran and six powers agreed late last year on an interim deal to curb Tehran's nuclear work in exchange for some easing of sanctions that have battered the oil producer's economy and they will next week start talks on a long-term agreement.
The IAEA investigation into what it calls the possible military dimensions (PMD) to Iran's nuclear actvity is separate from, but closely linked to, wider diplomacy between Tehran and the United States, France, Germany, Britain, Russia and China.
The IAEA investigation is focused on the question of whether Iran sought atomic bomb technology in the past and, if it did, to determine whether such work has since stopped.
Diplomats say the way the Iran-IAEA talks progresses will be important also for the outcome of the big powers' diplomacy, which the West hopes will lead to a settlement denying Iran the capability to make a nuclear weapon any time soon.
"Continued progress on resolving PMD issues will go a long way to demonstrate to the international community that Iran is not pursuing nuclear weapons and is willing to come clean about its past activities," Kelsey Davenport of the Arms Control Association, a U.S. research and advocacy group, said.
IAEA PROBE WILL "TAKE TIME"
The IAEA said on Sunday that Iran had agreed to take seven new practical measures within three months under a November transparency deal with the IAEA meant to help allay concern about the nuclear programme.
For the first time, one of them specifically dealt with an issue that is part of the U.N. nuclear agency's inquiry into suspected atomic bomb research by Iran, which has repeatedly denied any such ambitions.
The IAEA said Iran would provide "information and explanations for the agency to assess Iran's stated need or application for the development of Exploding Bridge Wire detonators".
Although such fast-functioning detonators have some non-nuclear uses, they can also help set off an atomic device.
The Vienna-based U.N. agency has been investigating accusations for years that Iran may have coordinated efforts to process uranium, test explosives and revamp a missile cone in a way suitable for a nuclear warhead.
Other steps to be taken by Iran by mid-May include inspector access to the Saghand uranium mine and design information about a planned reactor the West fears could yield weapons material.
Varjoranta said Iran had implemented six previously agreed steps under the November framework accord, including providing inspectors access to two-nuclear related sites.
"Since November everything has gone as planned," he said, adding more steps would follow: "These things take time."