Graphite has many peaceful uses, including steel manufacture, but also can be used as a casing for molten weapons-grade uranium to fit it to nuclear warheads or to shield the cones of conventional missiles from heat.

With most countries adhering to international agreements banning the sale of such ''dual-use'' materials to Tehran, Iran has been forced to buy it on the black market, Iranian exile Alireza Jafarzadeh told The Associated Press - allegations confirmed by a senior diplomat familiar with Iran's covert nuclear activities.

Phone calls to Iranian diplomats seeking comment were not answered.

While with the National Coalition of Resistance of Iran, Jafarzadeh disclosed information about two hidden nuclear sites in Iran in 2002 that helped uncover nearly two decades of covert Iranian atomic activity - and sparked present fears Tehran wants to build the bomb.

Much of the equipment - including centrifuges for uranium enrichment and other technology with possible weapons applications - was acquired on the nuclear black market.

Those implicated include Dutch businessman Henk Slebos, who is awaiting trial in the Netherlands on charges of importing banned material - including 100 pieces of graphite - as part of disgraced Pakistani nuclear scientist Abdul Qadeer Khan's clandestine smuggling network.

Jafarzadeh, whose organization was banned in the United States for alleged terrorist activity and who now runs the Washington-based Strategic Policy Consulting think tank, said Iran was additionally smuggling and trying to manufacture a graphite-based substance called ceramic matrix composite. The highly heat-resistant compound is also used in missile technology.

He said he learned this from sources of information within Iran.

While Iran does not now have reactors using such moderators, it insists it has the future right to all aspects of peaceful nuclear technology.