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    UPDATE 3-U.N. nuclear chief rejects Iran "saboteurs" accusation

    * Amano says still hopes for more Iran talks "quite soon"

    * IAEA seeks to unblock probe into suspected bomb research

    * No concrete results in series of meetings with Tehran

    * Iran denies it is seeking nuclear weapons capability

    LONDON/VIENNA, Oct 17 (Reuters) - The U.N. nuclear chief

    dismissed Iran's allegation his agency may have been infiltrated

    by saboteurs and voiced concern about "intensive activities" at

    the Parchin military installation that his inspectors want to

    examine.

    Years of diplomacy and sanctions have failed to resolve a

    stand-off between the West and Iran over its nuclear programme,

    raising fears of last-resort Israeli military action and a new

    Middle East war destabilising to the global economy.

    Yukiya Amano, who is seeking to unblock a long-stalled

    investigation into suspected nuclear weapons research in the

    Islamic state, also said on Wednesday he hoped for a new

    high-level meeting with Tehran soon but no date had been set.

    His agency's relations with Iran have become testy in recent

    months. Iran's nuclear energy chief said in Vienna last month

    the U.N. International Atomic Energy Agency may have been

    infiltrated by "terrorists and saboteurs".

    Western diplomats have dismissed the Iranian allegations

    against the IAEA as a manoeuvre to divert attention from

    Tehran's stonewalling of its inquiry.

    "Sometimes it is not useful to dignify these claims by

    providing an official answer," Amano said in London when asked

    about the saboteur accusation - apparently based on Iranian

    perceptions that inspectors pass on their findings to Western

    intelligence agencies.

    But, the veteran Japanese diplomat said, "this is baseless

    ... We are not involved in these activities."

    His comments about Parchin will likely reinforce suspicions

    among Western diplomats, first voiced early this year, that Iran

    is still trying to remove any evidence of illicit

    nuclear-related activity at the facility southeast of Tehran.

    Asked whether Iran was continuing to dismantle a site that

    is part of the Parchin complex, which U.N. inspectors can now

    only monitor via satellite imagery, Amano told Reuters: "Yes."

    Addressing London's Chatham House think-tank, he later said:

    "They are undertaking quite intensive activities at Parchin."

    Iran has dismissed allegations of a cover-up aired about

    Parchin, which it says is a conventional military facility.

    The U.N. nuclear agency believes Iran, possibly a decade

    ago, may have carried out explosives tests relevant for nuclear

    weapons development in a steel chamber at Parchin.

    IRAN UNDER PRESSURE

    In Vienna, a Western diplomat said the suspected clean-up

    work at Parchin "hasn't abated".

    Amano said in June satellite images indicated buildings were

    being demolished and soil removed at Parchin.

    A U.S.-based think-tank published new satellite imagery of

    Parchin on Wednesday which it said showed "a further phase of

    activity" and that Iran appeared to be removing tarpaulin covers

    placed earlier on two buildings at the site, including one where

    the suspected tests may have taken place.

    "Alterations to the site for all intents and purposes have

    to be seen as clean-up operations with the intent to degrade or

    eliminate the IAEA's ability to examine the site," the Institute

    for Science and International Security said.

    The IAEA, a Vienna-based U.N. agency tasked with preventing

    the spread of nuclear arms in the world, is trying to revive its

    bomb research investigation that has made no substantive headway

    for four years because of Iranian non-cooperation.

    Amano said the IAEA was committed to dialogue with the

    Islamic Republic, which says its nuclear programme is entirely

    peaceful and only aimed at producing electricity.

    "We have offered that we are willing to meet with them in

    the very near future ... That (will) be a high-level meeting and

    I hope we can have a meeting quite soon," he said.

    A senior IAEA team has held a series of meetings with Iran

    since January, but they have yet to yield concrete results. The

    last round of discussions took place in August.

    Another Western diplomat in the Austrian capital said the

    IAEA had "really been pushing Iran to set a date" for a new

    meeting, but Tehran had so far declined to do so. "The delay is

    coming from the Iranian side," the envoy said.

    Iran denies Western accusations that it is seeking to

    develop the capability to make nuclear bombs. But its refusal to

    curb activity that can have both civilian and military purposes

    has drawn increasingly tough Western sanctions.