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Vienna – Iran said Thursday it would press ahead to build a nuclear reactor despite a U.N. nuclear agency’s decision against giving technical assistance to the project.

At the same time, the Islamic Republic also made a conciliatory move toward the international community, agreeing to answer another round of questions from U.N. nuclear inspectors.

The decisions followed a week of heated exchanges behind closed doors between Western countries that fear Iran will use the project in a weapons program and developing countries that support Iran’s claims that its intentions are peaceful.

The deal puts the project on hold, said Mohamed ElBaradei, director general of the International Atomic Energy Agency, the U.N.’s nuclear arm. That means it will not receive funding for the next two years, but it could be reinstated at some future date.

The finely tuned language is “constructive ambiguity,” said a Middle Eastern diplomat attending the meeting. The decision to halt funding was reached by consensus, indicating broad agreement among the IAEA board of governors, which includes representatives of 35 countries.

The diplomat and others underscored that there are far larger stakes than a single project – the question of whether Iran will halt its uranium-enrichment program as demanded by the U.N. Security Council and whether the sharp standoff between the Islamic republic and the West will calm down.

“Given the broader picture, it doesn’t make much sense making a huge fight about it. The Iranians know that if the issue comes to a vote, they don’t have the votes,” the diplomat said.

Iran appeared to recognize that the rejection of the project represented a lack of support even among usual allies and moved Thursday to reassure such countries that it had good intentions.

The Iranian ambassador to the U.N. agencies in Vienna, Ali Asghar Soltanieh, reasserted his country’s contention that its program was peaceful, and ElBaradei announced that Iran had indicated to the IAEA that it would allow the inspection of a technical university that is not strictly required under the country’s safeguards inspection agreement with the U.N. nuclear agency.

Iran has been reported to the Security Council for failure to abide by IAEA resolutions demanding that it halt uranium enrichment and disclose details of its 18-year-long clandestine effort to acquire nuclear technology.

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