The new facility is in Arak, surrounded by desert southwest of Tehran and the government says it will produce radioactive isotopes for medical treatments. However, a byproduct of the heavy-water process is plutonium, one of the key fuels for nuclear weapons, The New York Times reported.
The IAEA has never turned down a request for technical assistance to ensure safe operation but the United States began lobbying against aid long before the Vienna meeting, the newspaper said.
Robert Einhorn, from the Center for Strategic and International Studies in Washington, said the agency's board should not believe Iran's claim the Arak project was entirely peaceful.
"A 12-inch hunting knife could also be used to spread jam on your toast in the morning," Einhorn said.
But Ali Asghar Soltanieh, Iran's ambassador to the IAEA, refuted military aspirations, saying Arak's output would aid hospitals, agriculture and industry.
"The world should know the other side of the coin not just what the White House says," he told the Times.