By Fredrik Dahl

VIENNA (Reuters) - The U.N. nuclear watchdog chief said on Monday Iran had begun implementing transparency measures ahead of an Aug 25 deadline, as part of a long-running investigation into suspected atomic bomb research by Tehran.

Yukiya Amano, speaking at Vienna airport after talks with President Hassan Rouhani in the Iranian capital, said he expected progress by next Monday over the five steps the country agreed three months ago.

They include providing information about two issues that are part of the U.N. nuclear agency's inquiry into what it calls the possible military dimensions (PMD) of Iran's nuclear program, which Tehran says is entirely peaceful.

Amano's comments suggested some increased optimism after his meetings in Iran on Sunday, but it remained unclear whether it would meet next week's target date. Diplomatic sources last month said the U.N. watchdog was worried about slow headway in the nuclear probe.

The long-stalled investigation is closely tied to Tehran's negotiations with six world powers aimed at ending a decade-old standoff over its atomic activities and dispelling fears of a new Middle East war.

"The implementation of these five measures started," Amano, director general of the International Atomic Energy Agency (IAEA), told reporters upon his return from Tehran, without elaborating on what Iran was undertaking.

"We have started and that is important and I expect that progress will be made over the next week," said Amano, after securing what he called on Sunday a firm Iranian commitment to cooperate with the IAEA's investigation.

Iran denies its program has any military objectives, but it has promised since Rouhani, a pragmatist, took office in mid-2013 to work with the IAEA to clarify its concerns.

Western officials say it is central for Iran to address the suspicions for the chances of a successful outcome of the parallel talks on a diplomatic solution between Iran and the United States, France, Germany, Britain, China and Russia.

Story continues

With major gaps remaining over the permissible future scope of Iran's uranium enrichment program - activity which can have both civilian and military uses - the talks between Iran and the six major states were last month extended until Nov. 24.

DETONATOR DEVELOPMENT

Under a phased Iran-IAEA transparency agreement reached in November - an attempt to jumpstart the investigation - Iran agreed in May to carry out the five steps by late August.

But diplomatic sources said in July that the IAEA was concerned about Iran's lack of engagement with the investigation. They said there was still time for Iran to implement the agreed measures, noting that it had occasionally waited until the last minute to make concessions in the past.

After years of what the West saw as Iranian stonewalling, Iran as a first step in May gave the IAEA information it had requested about Tehran's reasons for developing exploding bridge wire detonators. These can be used to set off an atomic explosive device but Iran says they are for civilian use.

Amano said the IAEA had received "further clarification" on this matter during the visit to Tehran, but gave no details.

The two issues in the inquiry that Iran agreed to address by late August concern alleged experiments on explosives that could be used for an atomic device and studies related to calculating nuclear explosive yields.

They were among 12 specific areas listed in an IAEA report issued in 2011 with a trove of intelligence indicating a concerted weapons program that was halted in 2003 - when Iran came under increased international pressure. The intelligence also suggested some activities may later have resumed.

Amano made clear his view that Iran should step up its cooperation with the IAEA investigation. "Certainly, we are of the view that we need to accelerate," he said.

(editing by Ralph Boulton)