By Fredrik Dahl

VIENNA (Reuters) - Iran has failed to address concerns about suspected atomic bomb research by an agreed deadline, the U.N. nuclear watchdog said on Friday, a setback to hopes for an end to an international stand-off over Tehran's atomic activity.

The lack of movement in an inquiry by the International Atomic Energy Agency will disappoint the West and could further complicate efforts by six world powers to negotiate a resolution to the decade-old dispute with Iran over its nuclear ambitions.

An IAEA report obtained by Reuters showed that little substantive headway had so far been made in the U.N. agency's long-running investigation into what it calls the possible military dimensions of Iran's nuclear program.

The Islamic Republic has implemented just three of five nuclear transparency steps that it was supposed to by Aug. 25 under a confidence-building deal it reached with the IAEA in November, according to the quarterly report.

Crucially, it has not provided information on the two issues that are part of the IAEA's investigation: alleged experiments on explosives that could be used for an atomic device, and studies related to calculating nuclear explosive yields.

The report said Iran, where a president seen as pragmatic took office in 2013 and revived diplomacy with the West, told the IAEA last week that most suspicions over its program were "mere allegations and do not merit consideration".

A Vienna-based diplomat called that statement "worrying".

The IAEA had also observed via satellite imagery "ongoing construction activity" at Iran's Parchin military base, the report said. Western officials believe Iran once conducted explosive tests there of relevance in developing a nuclear weapon and has sought to "cleanse" it of evidence since then. Iran has long denied U.N. nuclear inspectors access to the base.

Iran dismisses suspicions that it seeks to develop nuclear weapons capability from its enrichment of uranium. It says the program is for peaceful energy purposes only and that it is Israel and its assumed atomic arsenal that threatens peace.

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Iran has been promising to cooperate with the IAEA since Hassan Rouhani was elected president last year.

Rouhani's election raised hopes of a settlement of the dispute after years of tension and fears of a new Middle East war, and an interim accord was reached between Iran and the six powers in Geneva in November last year.

As part of the cooperation accord struck between the IAEA and Iran the same month to try and revive the stalled investigation, Tehran agreed in May to carry out five specific steps by late August to help allay international concerns.

But so far, the report said, Iran had not implemented those dealing with the inquiry, adding that discussions on the two issues only began at an Aug. 31 meeting in Tehran.

The IAEA also said one member of its team had not received a visa by Iran for that visit, the third time it happened for this person, and that it was "important that any staff member identified by the agency ... is able to participate in the agency's technical activities in Iran." It did not elaborate.

NO "ENDLESS" INVESTIGATION

Western officials say Iran must address the IAEA's concerns if there is to be any chance of success in the parallel diplomatic negotiations aimed at curbing the country's nuclear work in exchange for a gradual ending of sanctions on Tehran.

Iran and the United States, France, Germany, Britain, Russia and China failed to meet a July target date for reaching a comprehensive deal because of persistent wide differences over the permissible size of Iran's uranium enrichment program.

They now face a new deadline of Nov. 24, with talks between the seven states due to resume in New York later this month.

Marie Harf, a spokeswoman for the U.S. State Department, told a regular news briefing she could not comment on the substance of the report as it had yet to be officially released.

However, she said Washington looked at the Iran issue in "a comprehensive way", while adding: "In general ... we've continued to call on Iran to cooperate fully without delay in working with the IAEA. ... It's something we're very concerned about."

Western diplomats say the sides in the nuclear talks remain far apart on what a final deal should look like - especially over how many enrichment centrifuges Iran can operate. They say successful outcome in the negotiations is far from guaranteed.

While the big powers' diplomacy is focused on limiting Iran's future production of enriched uranium, the IAEA has for years been investigating alleged research in the past that could be used to turn such fissile material into atomic bombs.

In 2011, the Vienna-based U.N. agency published a report that included intelligence indicating Iran had a nuclear weapons research program that was halted in 2003 when it came under increased international pressure. The intelligence suggested some activities may later have resumed.

After years of what the West saw as Iranian stonewalling, Iran as a first step in May gave the IAEA information about why it was developing "bridge wire" detonators, which can be used to set off atomic explosive devices. Iran says they are for civilian use, and wants this topic in the investigation closed.

A senior diplomat familiar with the Iran file said the IAEA's inquiry would not be an "endless process", suggesting that it would at some point present an assessment to its 35-nation governing board based on the information it then has.

"I think it would not be realistic to assume that there is going to be a black and white solution to this. This is a very complicated issue," the diplomat said.

(Additional reportng by David Brunnstrom; Editing by Dominic Evans and Jonathan Oatis)