Iran has diluted its entire stock of medium-enriched uranium as required under a November deal with world powers, the UN atomic agency said in its latest report, which has been seen by AFP. 

Talks to reach a nuclear deal with Iran have been extended beyond an initial deadline of yesterday.

The International Atomic Energy Agency (IAEA) has said Iran was standing by its international commitments.

As agreed under a so-called joint plan of action reached in November, Iran has cut half of its stock of 20% enriched uranium down to 5% purity.

The rest was being converted into uranium oxide.

iran also refrained from enriching above the 5% level at any of its nuclear facilities, the IAEA report said.

Iran and world powers have been trying to reach a crucial nuclear deal to alleviate international fears that Iran is seeking a nuclear weapon.

Early Saturday, they agreed to give themselves four more months after marathon talks in Vienna.

Iran has, however, always insisted its nuclear programme is solely for peaceful purposes.

Uranium must be enriched to 90% to make an atomic bomb but 20% purity levels are just a short step from producing weapons-grade material.

Under the November interim deal, Iran and the five permanent members of the UN Security Council plus Germany agreed that Iran would freeze certain nuclear activities for six months in return for some sanctions relief.

The West's goal is to expand the time needed for Iran to develop a nuclear weapon, giving the world ample warning of any such "breakout" push.

Talks are due to resume in the coming weeks, with 24 November the new deadline for a lasting deal, diplomats said in Vienna.

Lead negotiator and EU foreign policy chief Catherine Ashton spoke of "tangible progress" in the talks so far but noted that "significant gaps on some core issues" remain.