NATANZ, Iran (Reuters) - Iran on Wednesday took a group of journalists deep underground into the heart of a nuclear plant that Washington and the European Union want permanently closed and which until late 2002 was a closely guarded secret.

About 30 local and foreign journalists visited the Natanz uranium enrichment facility, 150 miles south of Tehran. The visit represented an unusual gesture of openness by the Islamic state, which had not previously allowed reporters inside the plant.

Iran says its nuclear program is nothing for the world to fear and will only be used to generate much-needed electricity.

But Washington and the EU fear Iran could use its nuclear plants to produce bombs, and have raised particular concerns that Natanz could be used to make bomb-grade fuel.

The journalists, invited to accompany President Mohammad Khatami on an inspection tour of the 450-hectare (1,110-acre) site, were taken deep inside a building where, two levels below ground, they were shown a vast empty hall designed to house 50,000 enrichment centrifuges.

Centrifuges purify uranium fluoride gas into reactor or bomb fuel by spinning at high speeds. Low-grade enriched uranium is used in atomic power plants but highly enriched uranium can be used in the core of a bomb.

Iranian officials said the enrichment facility had been built more than 18 meters (54 feet) below ground due to "security problems." Defense experts say this is a precaution against possible aerial attack by the United States or Israel, which have vowed to stop Iran acquiring nuclear arms.

Approaching the complex, ringed by arid mountains, journalists counted at least 10 anti-aircraft batteries.

WORK SUSPENDED

At the heavily guarded main gate there were no signs to indicate the nature of the sprawling site whose existence was first revealed by an Iranian exile group in late 2002, prompting international concern about Iran's atomic ambitions.

International Atomic Energy Agency (IAEA) inspectors first visited Natanz in early 2003 and in October of that year sealed a nearly-finished pilot enrichment facility there containing dozens of centrifuges as part of an agreement between Iran and the EU.

Iran says the suspension of nuclear fuel work is a temporary confidence-building measure and that it will never give up its program completely.

"IAEA inspectors visit this facility at least once a month and also use a monitoring system to check the suspension," Mohammad Saeedi, deputy head of Iran's Atomic Energy Organization, told reporters.

"We can start test enrichment at any time," said Ehsan Monajemi, construction project manager at Natanz. "In the pilot section centrifuges are installed and are ready for enrichment."

"The sealing of the facilities has affected the morale of our people. It would be sad if it continued."

European diplomats say Iran has offered in its negotiations with the EU to restrict work at Natanz to a small pilot facility of around 500 centrifuges and will not build the planned main enrichment facility of some 50,000 centrifuges.

While the pilot facility would be too small to produce usable quantities of weapons-grade material, it would allow Iran to master the technical know-how to do so in future and is therefore unlikely to be acceptable to Washington, which wants Iran's case sent to the U.N. Security Council.

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