MOSCOW -- The UN nuclear watchdog's failure to condemn Iran has reinforced Russia's will to help the Islamic republic build up its nuclear program, the Russian Foreign Ministry said Saturday.

The International Atomic Energy Agency (IAEA) noted in a report presented at a Vienna meeting last Wednesday that Iran had failed to report certain nuclear activities. Yet it stopped short of slapping sanctions on the country and merely called for it to accept stricter inspections of its nuclear sites.

"Since the IAEA issued no reproach, there is no reason to put an end to our cooperation," Foreign Ministry Spokesman Alexander Yakovenko told AFP.

Russia has drawn U.S. ire for building Iran's first nuclear reactor at Bushehr and for insisting that the oil-rich country is not seeking to develop a nuclear weapons program.

"We are for total transparency of Iran's nucler programs and we are for Iran's signing the additional protocol to lift the worries expressed by certain countries," he said.

The spokesman said the nuclear fuel would be delivered to Iran after the two sides sign an agreement on the return of used fuel. Chairman of the Russian Duma's Committee for CIS Affairs Andrei Kokoshin also said on Friday that Tehran-Moscow nuclear cooperation is "transparent."

During a meeting with Iranian Ambassador to Moscow Gholamreza Shafei, he said the pursuit of a transparent nuclear cooperation is a legitimate right of both states.

"Moscow believes that Tehran has the right to pursue nuclear activities, he stressed.

As a signatory to the Nuclear Non-Proliferation Treaty (NPT), Iran has the right to insist that it be allowed to put up the necessary facilities in this regard, Kokoshin added.

The Islamic Republic of Iran enjoys special importance in Russian foreign policy, he reiterated, and called for further expansion of ties between the two countries.

Referring to Tehran-Moscow friendly cooperation and similarity of stances in various regional and international issues, including those affecting Afghanistan and Tajikistan, he stressed that the two countries' cooperation is in line with the need to advance their national interests.

Moscow respects Tehran's fair and principled stances on different issues, he reiterated.

For his part, Shafei voiced the determination of senior Iranian officials to expand ties with Russia.

He praised Russia's determination to stand by Iran amid renewed pressure by the U.S. to end their nuclear cooperation.

The Islamic Republic of Iran is pursuing a nuclear program for peaceful purposes as guaranteed by international law and regulations, stressed the Iranian envoy.

Russian Atomic Energy Minister Alexander Rumyantsev also told reporters that Iran and Russia may sign an agreement in the near future on the return of spent fuel from the nuclear power plant under construction in Bushehr.

To date, a draft agreement has undergone coordination with all parties concerned. It is still to be scrutinized by independent ecological specialists.

The start of operation of the first reactor at the Bushehr Nuclear Power Plant is scheduled for 2004. The power plant will go on stream in 2005.

"The slight delay as compared with the original schedule is due to objective industrial reasons and is in no way related with the political situation," Rumyantsev said.

The first portion of spent nuclear fuel could return to Russia in eight to 10 years' time.