The diplomat said Thursday that the officials saw a small number of advanced centrifuges for enriching uranium at the Natanz plant southeast of Tehran. His comments follow Iran's announcement the day before.
But while Iran said installation had begun, the diplomat said the officials only saw machines positioned for installation Wednesday.
The machines are much faster than ones now enriching. Iran says it only wants reactor fuel but the centrifuges can also produce fissile warhead material.
The diplomat demanded anonymity because his information was confidential.