VIENNA (AFP) -Iran's ambassador to the IAEA Ali Ashgar Soltanieh Thursday said Iran would continue to build Arak reactor since "hospitals desperately need the radioisotopes" the reactor is designed to make.

International Atomic Energy Agency Board of Governors on Thursday indefinitely blocked Iran's bid for technical aid for the reactor.

In fact, construction would be speeded up "in order to fulfill the humanitarian demand,” Soltanieh said in a speech to the board.

But diplomats said the ruling, the board adopted by consensus after days of haggling between industrialized and developing nations, left a theoretical possibility of revisiting Iran's request in future.

The IAEA has other outstanding issues it wishes to clear up but Soltanieh made clear that there would be no more such steps unless the UN Security Council stops threatening Iran with sanctions.

Soltanieh even warned that the Iranian parliament could cut the country's cooperation with IAEA inspectors if the Council goes ahead with sanctions, according to a copy of his speech to the board.

“A draft of a bill is already prepared by some members of our Parliament to the effect that if the UN Security Council passes a resolution under Chapter VII, the interaction and cooperation with the IAEA will be reconsidered,” he said in a statement.

“As it has been adopted by the Board of Governors, the issues related to legal obligation has to be distinct from voluntary, confidence building, and transparency measures. The Islamic Republic of Iran has fully committed to its obligation under the Comprehensive Safeguards Agreement.

“However as reflected in the last report of the Director General, Iran will be prepared to deal with the few remaining outstanding issues provided that the nuclear dossier is retuned back in full from the UN Security Council, to the framework of the Agency,” he added.

In a compromise hammered out in negotiations ahead of the board meeting, Iranian requests for IAEA technical assistance on seven other nuclear energy projects judged not to pose a risk of being diverted to bomb-making were approved by the board.

Iranian Foreign Minister Manouchehr Mottaki on Thursday defended the project and said IAEA was legally required to provide technical help to a signatory of the nuclear Non-Proliferation Treaty. "It is the duty of the IAEA to help. If they help, we will appreciate it," Mottaki said in Tehran. "If not, we will do it on our own."

"The decision is that the (Arak) project will be definitely put on hold," IAEA director Mohamed ElBaradei told reporters. "If confidence in the nature of Iran's program were to be restored ... the board might consider revisiting the decision."

He told the board meeting, however, Iran had just agreed to let IAEA inspectors take further environmental samples from research equipment to try to determine the origin of traces of highly enriched, or weapons-quality, uranium found there.

ElBaradei said Iran also agreed to provide inspectors access to operating records needed to audit the level of uranium enrichment at its Natanz pilot nuclear fuel plant after a prolonged refusal to do so.

"These are important steps in the right direction," he said of Iran's gestures, possibly made to help blunt Western pressure for tough sanctions, opposed by Russia and China.

Soltaneih added in his statement that the threat of armed attack against peaceful nuclear installations of Iran by the United States and Israeli regime has been augmented.

“Any armed attack on and threat against unclear installations devoted to peaceful purposes constitute a violation of the principles of the United Nations Chapter, International Law and the Statute of the Agency,” he said.