VIENNA (Reuters) - Iran's nuclear program is struggling with low-performing enrichment machines but it would still be able to produce material that could be used for atomic bombs, according to a U.S. think tank.
In a report coinciding with rising tension between Iran and the West, the Institute for Science and International Security (ISIS) also said tougher sanctions could make it more difficult for the Islamic state to obtain key parts for its uranium enrichment work.
Enriched uranium -- produced by spinning centrifuges at supersonic speeds to increase the fissile isotope ratio -- can be used to fuel power plants or for the core of a nuclear missile if processed much further.
The ISIS report's findings, published late on Monday, dovetail with Western allegations that Iran's nuclear enrichment program makes little sense from a commercial point of view and that it is part of a covert bid to develop an atomic bomb capability.
Iran says it needs to refine uranium for a planned network of nuclear power plants. Its only existing plant, at Bushehr, was built by Russia and is fueled by Russian enriched uranium.
ISIS said Iran's main enrichment complex at Natanz "is unlikely to ever produce enough LEU (low-enriched uranium) for a nuclear power reactor the size of" Bushehr.
Western experts say tightening sanctions, technical hurdles and possible cyber sabotage have slowed Iran's atomic advances.
But it is still amassing LEU and the experts say it now has enough to make at least two bombs if refined much more, should it decide to. Iran denies seeking to develop nuclear arms.
For years, Tehran has been seeking to replace the breakdown-prone 1970s vintage IR-1 model of centrifuge it now uses to refine uranium, but the changeover has been hampered by sanctions restricting access to vital parts, analysts say.
ISIS said the average monthly production of LEU had risen but that the number of centrifuges had grown disproportionately.
"During the past year, the performance of the IR-1 centrifuges ... has faltered," ISIS said. Iran is also facing a shortage of crucial material called maraging steel, "sharply limiting the number of IR-1 centrifuges it can make."
In September, a U.N. nuclear watchdog report said Iran had begun installing two newer versions for larger-scale testing.
Such machines would allow Iran to produce refined uranium much faster -- potentially also reducing the time needed to make weapons-grade material -- but analysts say it remains unclear whether it can build them in sufficient numbers.
Iran's decision in early 2010 to raise the level of some enrichment from the 3.5 percent purity needed for normal power plant fuel to 20 percent worried Western states that saw this as a significant step toward the 90 percent needed for bombs.
Iran says it will use 20 percent uranium to fuel a Tehran research reactor making isotopes to treat cancer patients.
"Is the Iranian enrichment program on a trajectory toward being dedicated to producing weapon-grade uranium for nuclear weapons?" ISIS asked and replied: "Unfortunately, despite its severe limitations, this program is able to do so."
(Reporting by Fredrik Dahl; Editing by Karolina Tagaris)