Iran is poised for a major technological update of its uranium enrichment program that would vastly speed up production of material that can be used for both reactor fuel and nuclear warheads, diplomats told The Associated Press Thursday.

The diplomats said that Iran last week told the International Atomic Energy Agency that it wants to install thousands of high-technology machines at its main enriching site at Natanz, in central Iran. The machines are estimated to be able to enrich up to five times faster than the present equipment.

Iran insists it does not want nuclear arms and argues it has a right to enrich for a civilian nuclear power program. But suspicion persists that the real aim is nuclear weapons, because Iran hid much of its program until it was revealed from the outside more than a decade ago and because of what the IAEA says are indications that it worked secretly on weapons development.

Defying U.N. Security Council demands that it halt enrichment, Iran has instead expanded it. Experts say Tehran already has enough enriched material for several nuclear weapons.

Nonproliferation expert Mark Fitzpatrick described the planned upgrade as a potential ``game-changer.''

``If thousands of the more efficient machines are introduced, the timeline for being able to produce a weapons worth of fissile material will significantly shorten,'' said Fitzpatrick, of the International Institute for Strategic Studies.

``This won't change the several months it would take to make actual weapons out of the fissile material or the two years or more that it would take to be able to mount a nuclear warhead on a missile, so there is no need to start beating the war drums,'' he said.  ``But it will certainly escalate concerns''. 

One of the diplomats said Iranian officials informed the Vienna-based nuclear watchdog that they planned to install as many as 3,132 of the new-generation centrifuges. He said a confidential note circulated Thursday to the IAEA's 35-nation board cited Iranian officials as saying that domestically developed IR-2m centrifuges would be used.

He said the letter was circulated to the board Thursday. IAEA delegation heads from the United States and its allies planned to discuss Iran's plans later in the day.

The planned upgrade deals a further blow to international efforts to coax Tehran to restore confidence in its aims by scaling back its nuclear activities and cooperating with agency attempts to investigate allegations of secret weapons work.

It comes ahead of planned talks next month where the United States, Russia, China, Britain, France and Germany will press Tehran to cut back on enrichment. Separately, IAEA experts are scheduled to visit Tehran Feb. 13 in their more than year-long effort to restart a probe of the weapons allegations.

Iran says it is enriching only to power reactors and for scientific and medical purposes. But because of its nuclear secrecy, many countries fear that Iran may break out from its present production that is below the weapons-grade threshold and start enriching to levels of over 90 percent, used to arm nuclear weapons.

Tehran now has more than 10,000 centrifuges enriching uranium at its main plant at Natanz, 225 kilometers (140 miles) southeast of Tehran, to fuel grade at below 4 percent. Its separate Fordo facility, southwest of Tehran, has close to 3,000 centrifuges producing material enriched to 20 percent, which can be turned into weapons-grade uranium much more quickly.

Iran has depended on domestically made IR-1 centrifuges whose design is decades old at both locations up to now, but started testing more advanced prototypes in the summer of 2010.

One of three diplomats who spoke to the AP said Iran gave no time frame for its planned upgrade. He said installation work had not started at Natanz, adding it would take weeks, if not months, to have the new machines running once technicians started putting them in. (AP)