VIENNA, June 8- The European Union voiced deep concern on Wednesday over Iran's announcement it would increase its capacity to produce higher-grade enriched uranium, saying Tehran was increasing its defiance of the U.N. Security Council.
The 27-nation EU, in a statement read out by Hungary's ambassador at a board meeting of the International Atomic Energy Agency (IAEA), said it noted with "grave concern" Iran's lack of cooperation with the U.N. nuclear watchdog.
"We note with particular concern the announcement made only today by Iran that it will increase its capacity to enrich (uranium) to 20 percent, thereby further exacerbating its defiance of the United Nations Security Council."
Iran said earlier it would shift its production of higher grade uranium to an underground bunker and triple its production capacity, an announcement certain to add to Western concern about the Islamic state's atomic ambitions.
Iran says it needs 20 percent enriched uranium to fuel a Tehran research reactor making medical isotopes for cancer treatment. But the West is worried because it brings Iran closer to the 90 percent purity level needed to make atomic bombs.
The EU statement said Iran must suspend its enrichment activities, something it has repeatedly refused to do.
The bloc also called on IAEA chief Yukiya Amano to submit to the IAEA governing board "at the earliest possible date a comprehensive analysis of the possible military dimensions of Iran's nuclear programme."
Amano has been voicing growing concern about possible work in Iran to develop a nuclear-armed missile and Western envoys believe he may firm up that suspicion in reports on the country's nuclear activities later this year.
An independent assessment of this sort could add weight to any renewed Western sanctions push against Iran, one of the world's largest crude oil producers.
(Reporting by Fredrik Dahl and Sylvia Westall; editing by Tim Pearce)
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