Iran vowed yesterday to press ahead with the construction of a heavy water reactor that could arm two atomic bombs each year, despite condemnation of its plans by the United Nations.

The announcement came after the U.N.’s atomic watchdog, the International Atomic Energy Agency, refused to provide safety assistance with the reactor being built at Arak, 120 miles south of Tehran.

The IAEA usually rubber stamps all such assistance programs. But in a mark of its unique concern over Iran’s nuclear ambitions and fears that Arak could produce weapons-grade plutonium, its 35-member board refused to sanction any help for the 40 megawatt reactor, due to come online in 2009.

The American ambassador to the IAEA, Gregory Schulte, said the consensus decision to withhold aid to Tehran “reflects the board’s continued concern about the nature of Iran’s nuclear program.

He added: “Heavy water reactors are well-suited to producing significant quantities of plutonium, a key ingredient in building nuclear weapons.”

The IAEA decision, taken in Vienna, prompted a quick and defiant official response from Tehran. The foreign minister, Manouchehr Mottaki, insisted that work would go on at Arak, with or without the IAEA. “It is the duty of the IAEA to help. If they help, we will appreciate it,” he said, before warning: “If not, we will do it on our own.”

The Arak installation, which is reportedly ringed by anti-aircraft batteries to fend off foreign air strikes, is a heavy water reactor that America says would produce enough plutonium by-product each year for two atomic bombs.

But Iranian officials insist that the nuclear plant, parts of which are thought to be being built underground for added protection from air attack, will be used to produce radioactive isotopes needed for medical work.

[Meanwhile, Iran was suspended from international soccer by FIFA yesterday because of government interference with the country’s soccer federation, the Associated Press reported.]