VIENNA (AP) -- Iran has converted three quarters of a nuclear stockpile that it could have turned quickly into weapons-grade uranium into less volatile forms and is well on the way toward transforming the rest, the U.N. atomic agency reported Thursday.
The development - agreed to by Iran under a nuclear deal it struck late last year with six world powers - leaves Tehran with substantially less of the 20-percent enriched uranium that it would need for a nuclear warhead.
Iran denies any interest in atomic arms. But it agreed to some nuclear concessions in exchange for a partial lifting of sanctions crippling its economy under the deal, which took effect in January.
Uranium at 20 percent is only a technical step away from weapons-grade material. By the time the agreement was reached late last year, Iran had amassed nearly 200 kilograms (440 pounds). With further enrichment, that would have yielded almost enough weapons-grade uranium for one atomic weapon - a threshold that Israel had vowed to prevent Iran from reaching by any means possible.
Under the agreement, Iran agreed to stop enriching to grades beyond 5 percent, the level most commonly used to power reactors. It also committed to neutralizing all its 20-percent stockpile - half by diluting to a grade that is less proliferation-prone and the rest by conversion to oxide used for reactor fuel.
In line with information given to The Associated Press by diplomats earlier this week, the U.N.'s International Atomic Energy Agency confirmed Thursday that Iran had completed the dilution process.
The confidential IAEA report obtained by the AP also said conversion was well underway, with over 50 kilograms (110 pounds) of the 20-percent material rendered into oxide.
Iran has until July to fulfill all of its commitments under the deal. But it has to show progress in exchange for sanctions relief, and it is eager to get its hand on the next tranche of some $4.2 billion of oil revenue funds that were frozen under international sanctions meant to force it into nuclear compromise.
It already has received more than half of that amount in exchange for step-by-step implementation of the agreement and the U.S. State Department announced Thursday that - with the IAEA confirming that dilution was completed - another $450 million installment was being released.
Up to now, "all sides have kept the commitments" they signed on to, State Department spokeswoman Marie Harf told reporters in Washington.
The November deal between Iran and the six - the United States, Russia, China, Britain, France and Germany - is meant to lead to a comprehensive deal placing long-term caps on Iran's enrichment program and other atomic activities in exchange for full sanctions relief. The two sides hope to reach agreement by July but can extend negotiations if both agree to do so.
Beyond its commitments to neutralize its 20-percent uranium stock, the IAEA report said that Iran also was complying with other obligations under the six-month interim plan, which restricts Tehran from expanding any activities that could be turned toward making a nuclear weapon.