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TEHRAN, Iran --Iran said Monday it is installing 3,000 centrifuges to enrich uranium at one of its nuclear facilities, effectively confirming that its nuclear program is running behind schedule as the devices were to have been in place two weeks ago.

Over the weekend, Iran dismissed reports from Europe that its uranium enrichment program had been stalled. Enriched uranium is used as fuel in nuclear reactors and, at a higher degree of enrichment, can also be used to make atomic bombs.

But Iran had said the installation of the 3,000 centrifuges at its facility in Natanz, located in central Iran, would be completed by the end of 2006. Its failure to do so has prompted reports that it is encountering technical difficulties in mastering large-scale enrichment.

Diplomats in Vienna -- where the International Atomic Energy Agency is based -- said Thursday that the enrichment program in Natanz had ground to a halt.

The diplomats said that suggests possible Iranian hesitancy to provoke U.N. Security Council sanctions harsher than the relatively mild penalties agreed on last month in response to Tehran's refusal to heed a council deadline to suspend enrichment.

Or, they said, it could be a sign of headway by relative moderates in the leadership unhappy with President Mahmoud Ahmadinejad's confrontational manner.

Some diplomats accredited or otherwise linked to the IAEA said some intelligence services believed the Natanz site could also be a front. While attention is focused on Natanz, Iranian scientists and military personnel could be working on a secret enrichment program at one or more unknown sites that is much more advanced, the diplomats said.

They spoke on condition of anonymity in exchange for discussing restricted information.

Other signs point to technical difficulties at Iran's nuclear facilities. Earlier this month, Vice President Gholamreza Aghazadeh, who heads the Atomic Energy Organization of Iran, told reporters that about 50 centrifuges had exploded during a test.

"We had installed 50 centrifuges. One night, I was informed that all the 50 centrifuges had exploded. ... Ahmadinejad called me and said: 'Build these machines even if they explode 10 times more,'" Aghazadeh was quoted as saying by Iranian media.

Iran has condemned the U.N. Security Council resolution imposing sanctions on it, and said it would move ahead with its nuclear program. Last month, Ahmadinejad boasted that Iran would soon celebrate, probably in February, the completion of its nuclear fuel cycle -- the processing of uranium from mining the ore to enriching it.

"We are moving toward the production of nuclear fuel, which requires 3,000 centrifuges and more than this figure," government spokesman Gholamhossein Elham told a news conference. "This program is being carried out and moving toward completion."

The United States and some of its allies accuse Iran of trying to produce nuclear weapons.

Iran denies this, saying its program is only for generating electricity. Tehran says that as a signatory to the Nuclear Nonproliferation Treaty, it has the right to develop a peaceful uranium enrichment program to produce nuclear power.

The IAEA has said it has found no evidence that Iran is trying to build nuclear weapons, but it has criticized the country for concealing certain nuclear activities and failing to answer questions about the program.

Iran first showed its ability to enrich uranium in February, when it produced a small batch of low-enriched uranium using a first set of 164 centrifuges at its pilot complex in Natanz.

Iran said it planned to move toward large-scale uranium enrichment involving 3,000 centrifuges, then expand the program to 54,000 centrifuges, which spin uranium gas into enriched material to produce nuclear fuel.

"We had installed 50 centrifuges. One night, I was informed that all the 50 centrifuges had exploded. ... Ahmadinejad called me and said: 'Build these machines even if they explode 10 times more,'" Aghazadeh was quoted as saying by Iranian media.