Though an oil producer and exporter, Argentina's reserves are running low and its demand is higher, while investment has lagged.

Argentina has had the Atucha I nuclear power plant since 1974, as well as the Embalse plant, which both generate power.

Construction on Atucha II started in 1981 but had to be stopped several times. The government says about 600 million dollars are needed to finish it.

Atomic Energy of Canada Limited (AECL) will be a partner in the plan, modernizing technology at the Embalse plant which operates with Canadian Candu technology.

In the longer run however the government also wants to build a fourth plant, according to a working document, as well as resume production of enriched uranium that was frozen in the 1980s.

Atucha I and Embalse generate 7-9 percent of the country's electricity, and that figure is expected to rise to 16 percent when Atucha II goes on line.

Argentina, the first Latin American country to get into the nuclear industry, now exports its technology. It recently sold a reactor to Australia and also exports to Algeria, South Korea, Belgium and Germany.

"I believe we have abided by laws and still believe we do, so it is regrettable that such a situation has occurred," a company official said.

Police have been investigating possible export routes from Japan after a Mitutoyo device was found at nuclear facilities in Libya inspected by the International Atomic Energy Agency between December 2003 and March 2004, media reports have said this year.

Mitutoyo is also suspected of exporting similar equipment to
Iran in 1997, and police have raided an Iranian trading firm in Tokyo in relation to the case, Kyodo said, citing police sources.

The devices were ordered by Scomi Precision Engineering of Malaysia, Kyodo said.

Scomi Precision, formerly a unit of Malaysian oil services firm Scomi Group Bhd, a firm controlled by the son of Malaysian Prime Minister Abdullah Ahmad Badawi, had been investigated by local police and cleared of any wrongdoing.

"The company has made a stand that it will not say anything," a Scomi Group spokeswoman told Reuters in Kuala Lumpur.

Mitutoyo, founded in 1934, has some 2,300 employees in Japan and 2,000 overseas.

The Japanese firm's Malaysian unit has not been investigated, said a company official at Mitutoyo (Malaysia) Sdn Bhd's head office outside Kuala Lumpur. He declined to be identified.

"No policeman came here. They only investigated Scomi. According to the police report, Scomi was an innocent party," the official said, adding that Malaysia did not require import licences for Mitutoyo's precision-measuring machines.

The purchases come at a time when Iran is refusing to bow to growing Western demands to halt its nuclear program, and after Iranian President Mahmoud Ahmadinejad has called for Israel to be "wiped off the map."

The new submarines, built at a cost of $1.3 billion with Germany footing one-third of the bill, have diesel-electric propulsion systems that allow them to remain submerged for longer periods of time than the three nuclear arms-capable submarines already in Israel's fleet, the Jerusalem Post reported.

The latest submarines not only would be able to carry out a first strike should Israel choose to do so, but they also would provide Israel with crucial second-strike capabilities, said Paul Beaver, a London-based independent defense analyst.

Israel is already believed to have that ability in the form of the Jericho-1 and Jericho-2 nuclear-capable ballistic missiles, which are buried so far underground they would survive a nuclear strike, he said.

"The Iranians would be very foolish if they attacked Israel," Beaver said.

German officials have said the contract for the new submarines was signed July 6, and the Jerusalem Post reported this week the subs will be operational shortly.

Israel, operating on a policy of nuclear ambiguity, has never confirmed or denied whether it has nuclear weapons. It is believed, however, to have the world's sixth-largest stockpile of atomic arms, including hundreds of warheads.

Iran so far has resisted calls by the U.N. Security Council to halt uranium enrichment, which can produce, among other things, the material for atomic bombs. The council set an Aug. 31 deadline that is accompanied by the threat of sanctions.

The dispute over Tehran's nuclear program revolves around Iran's insistence it wants to master the technology simply to generate electricity. Critics say Iran wants to make nuclear weapons.

The Dolphin submarine could be one of the best deterrents, Beaver said. The technology on the subs makes them undetectable and gives them defensive capabilities in the case of attack, he said.

"They are very well-built, very well-prepared, lots of interesting equipment, one of the best conventional submarines available," Beaver said. "We are talking about a third string of deterrence capabilities."

Michael Karpin, an expert on Israel's atomic weapons capabilities who published a book on the issue in the United States, said nuclear-armed submarines provide better second-strike capabilities than missiles launched from airplanes.

"Planes are vulnerable, unlike nuclear (armed) submarines that can operate for an almost unlimited amount of time without being struck," Karpin said. "Second-strike capabilities are a crucial element in any nuclear conflict."

In Germany, members of two opposition parties criticized the deal. Winfried Nachtwei, national security spokesman for the Greens, said the decision was wrong because Germany had obtained no guarantee the submarines would not be used to carry nuclear weapons.

"This red line should not be crossed," Nachtwei was quoted as saying by the newspaper Taz. "Otherwise it is a complete renunciation of Germany's policy of non-proliferation."

David Menashri, an Israeli expert on Iran, said Tehran is clearly determined to obtain nuclear weapons and "the purchase of additional Dolphin submarines by Israel is a small footnote in this context."

What also makes Tehran dangerous, Beaver said, is that it may not understand the consequences of carrying out a nuclear strike.

"They (Iran) have a belligerent leadership and that's why Israel is prudent in ensuring that it has that deterrent capability," Beaver said. "What they (the submarines) are is a very good insurance policy."

TEHRAN, Aug. 25 (Xinhua) -- Iran has made fresh achievements in its peaceful nuclear activities and will soon announce them, government spokesman Gholam-Hossein Elham said Friday.

According to the official IRNA news agency, Elham said Iran has also achieved progress in other areas of science and technology.

The Iranian government spokesman made the remarks in a pre-sermon lecturer at this week's Friday prayer congregation in Tehran, but he did not elaborate on when Iran would make the announcement.

On Wednesday, the semi-official Mehr news agency said that Iran would soon announce an atomic breakthrough, which came just one day after Tehran made a response to a six-nation package aimed at resolving the Iranian nuclear issue.

"This great scientific achievement is the result of a long-term research project ... A top official will formally make the announcement," Mehr quoted an unidentified source as saying.

"The announcement will highlight Iran's mastery of different areas in nuclear science and will reinforce Iran's position as a nuclear country," the report said.

Iran is accused by the West of trying to produce nuclear weapons under the cover of a civilian nuclear power program.

However, Iran, the world's fourth largest oil exporter, says it needs to enrich uranium as a peaceful, alternative energy source and has the right to do so under the nuclear Non-proliferation Treaty.
Editor: Liu Dan

"The United States, with Coalition support, has eliminated two of Iran's regional rival governments - the Taliban in Afghanistan in November 2001 and Saddam Hussein's regime in Iraq in April 2003 - but has failed to replace either with coherent and stable political structures."

The report, called Iran, Its Neighbours And Regional Crises, adds that the recent conflicts between Israel and the Palestinians in Gaza and between Israel and Hezbollah in Lebanon have added to that instability.

One of the report's authors, Dr Ali Ansari, reader in modern history at the University of St Andrews, told Radio Four: "The United States needs to take a step back and reassess its entire policy towards Iran and work out, first of all, what does it want and how is it going to achieve it because at the moment everything is rather like putting a sticking plaster on a fairly raw wound and it is not really actually doing much at all."

The report, in its executive summary, says Iran has now superseded America as the most influential power in the Middle East.

"Iran is simply too important - for political, economic, cultural, religions and military reasons - to be treated lightly by any state in the Middle East or indeed Asia," it says.

It says the wars and instability in Afghanistan and Iraq have "further strengthened Iran", adding that: "The US-driven agenda for confronting Iran is severely compromised by the confident ease with which Iran sits in its region."

Concerning Iran's apparent attempts to develop nuclear weapons, the report says the country's importance in the region "helps explain why Iran feels able to resist western pressure".

"While the US and Europeans slowly grind the nuclear issue through the mills of the International Atomic Energy Agency and the United Nations Security Council, Iran continues to prevaricate, feeling confident of victory as conditions turn ever more in its favour," it says.