VIENNA, Austria (AP) - A recent House of Representatives committee report on Iran's nuclear capability is "outrageous and dishonest" in trying to make a case that Tehran's program is geared toward making weapons, a senior official of the UN nuclear watchdog has said.

The letter, obtained by The Associated Press on Thursday outside a 35-nation board meeting of the International Atomic Energy Agency, says the report is false in saying Iran is making weapons-grade uranium at an experimental enrichment site, when it has in fact produced material only in small quantities that is far below the level that can be used in nuclear arms. The letter, which was first reported on by The Washington Post, also says the report erroneously says that IAEA chief Mohamed ElBaradei removed a senior nuclear inspector from the team investigating Iran's nuclear program "for concluding that the purpose of Iran's nuclear program is to construct weapons."

In fact, the inspector was sidelined on Tehran's request, and the Islamic republic had a right to ask for a replacement under agreements that govern all states relationships with the agency, said the letter, calling the report's version "incorrect and misleading."

"In addition," says the letter, "the report contains an outrageous and dishonest suggestion that such removal might have been for 'not having adhered to an unstated IAEA policy barring IAEA officials from telling the whole truth about the Iranian nuclear program.'"

Dated Aug. 12, the letter was addressed to Rep. Peter Hoekstra, chairman of the House Permanent Select Committee on Intelligence. It was signed by Vilmos Cserveny, a senior director of the Vienna-based agency. An IAEA official, who spoke on condition of anonymity because he was not authorized to comment on the letter, said it was written "to set the record straight."

Jamal Ware, a spokesman for the House committee, confirmed they had received the letter and said the chairman had referred it to Rep. Mike Rogers, R-Mich., and Rep. Rush Hold, D-N.J. They will review it and issue a formal response if necessary, he said.

The dispute was reminiscent of the clashes between the IAEA and Washington over whether Saddam Hussein was trying to make weapons of mass destruction, including nuclear arms. American arguments that Saddam had such covert arms programs were given as the chief reason for invading Iraq and toppling Saddam.

ElBaradei's criticism of the U.S. standpoint on Iraq and subsequent perceptions that he was soft on Iran in his staff's investigation of Tehran's nuclear activities led to a failed attempt last year by Washington to prevent his re-election.

Solana cites “real progress” in Iran nuclear talks

European Union foreign policy chief Javier Solana, in his most upbeat comments so far, said on Friday he was "really making progress" in talks with Iran on its nuclear program, Reuters reported.

"I think I can say honestly that we're making progress. It doesn't mean that everything has been solved. That would be an exaggeration, but we are really making progress," he told a news conference after briefing EU foreign ministers on the talks in Brussels.

Solana said he and Iran's chief nuclear negotiator, Ali Larijani, had agreed to postpone a meeting planned on Thursday because Larijani needed more time to build consensus in Tehran on the terms for launching negotiations with the major powers.

The United Nations has demanded that Iran suspend uranium enrichment as a condition for opening talks on a package of incentives including civil nuclear cooperation.

President Mahmud Ahmadinejad struck a softer tone on Thursday, saying Iran was ready for "new conditions".

Solana said the definition of a suspension of enrichment was one of the outstanding issues, although not the only one.

Senior EU and Iranian officials were meeting every day to work on the remaining issues and would continue over the weekend, he said.

Solana, who had seven hours of talks with Larijani in Vienna last weekend, said he hoped to meet him again in the coming days and the next two weeks of diplomacy around the UN General Assembly in New York would be vital.

"We thought ... a little bit more time was needed in order to reach a consensus in his own country, amongst his own leadership ... in order to convey to me a possible positive answer to the question and to the ideas I put forward on Saturday," he said.

Solana said he was not worried that the United States, which has been pressing for UN sanctions over Iran's defiance on uranium enrichment, would lose patience. "I don't think our American friends will be losing their patience," he said.

"We are in the same boat. I am representing them. I am representing all the members of the Security Council. I am representing also the European Union, and I don't have a sense of losing patience."