Iran has been systematically providing false information to the International Atomic Energy Agency because it has been infiltrated by intelligence agencies keeping tabs on Iran's nuclear program, Iran's Atomic Energy Vice President Fereydoun Abbasi Davani has admitted.

Abbasi Davani, who heads the Iranian delegation taking part in the 56th session of the agency in Vienna, made the revelation in an interview with the Al-Hayat newspaper.

"The IAEA says it gets its information from the intelligence services belonging to the member states, and we monitor and followed up seven years ago activities of the British foreign intelligence service [MI6], which gathered information for people, which then exposed [Iranian nuclear scientists] to assassination at the hands of Zionist intelligence agents. Some of the information provided by the agency related to these events. For our part, we sometimes gave false information to protect our nuclear sites and our interests. This inevitably misled other intelligence agencies," Davani told Al-Hayat.

On Thursday, Israel said it would not attend a conference on the creation of a nuclear-free Middle East scheduled to take place in Finland.

"This announcement was made on Wednesday in Vienna during a meeting of the International Atomic Energy Agency by the director of the Israel Atomic Energy Commission, Shaul Chorev," spokesman Yigal Palmor told AFP.

The conference is scheduled to take place later this year or early in 2013, and is backed by the U.S., AFP reported Thursday.

Chorev reportedly told the IAEA meeting that a nuclear-free Middle East "will be possible only after the establishment of peace and trust among the states of the area, as a result of a local initiative, not of external coercion.”

"Such a process can only be launched when peaceful relations exist for a reasonable period of time in the region," Chorev said. "Regrettably, the realities in the Middle East are far from being conducive."

Israel has said it would sign the nuclear Non-Proliferation Treaty and renounce nuclear weapons only as part of a broader Middle East peace deal with Arab states and Iran that guaranteed its security.

Chorev, the Israeli delegate, said the concept of a region free of weapons of mass destruction "is certainly much less applicable to the current volatile and hostile" Middle East and would require a significant transformation in the region.

Chorev also warned Iran on Wednesday to stop its "direct and blunt threats" against his country, telling a 155-nation nuclear conference the Jewish state is ready to defend itself against any nation that menaces its existence.

Chorev avoided any suggestion that Israel was contemplating a military strike on Iran's nuclear facilities — a scenario that Prime Minister Benjamin Netanyahu is increasingly suggesting may be necessary to stop what he says is Tehran's path toward atomic arms.

Still, Chorev's hard-edged comments to the International Atomic Energy Agency's annual general conference were another reminder of the enmity between the archrivals that have led to highly charged tensions the United States and others fear may spiral into armed conflict.

Chorev said the Iranians were working towards nuclear weapons on many levels, building heavy water facilities, manufacturing plutonium for military purposes, and trying to develop a nuclear warhead for their long range Shihab-3 missiles.

Iran denies any interest in owning nuclear weapons. It says it is enriching uranium solely to make reactor fuel and for medical research. But Israel, which is widely considered to have such arms, asserts that Tehran wants ultimately to enrich to levels higher than reactor grade to create weapons-grade material used to arm warheads.

Israel, the U.S. and allies of the two nations have provided intelligence to the IAEA on alleged Iranian nuclear weapons research and development, and while Iran dismisses the intelligence as fabricated, the IAEA takes the allegations seriously.

Alluding to Iranian statements questioning Israel's right to exist, Chorev warned that Israel "does not remain indifferent in view of such direct and blunt threats."

"Israel is competent to deter its enemies and to defend itself," he told the meeting.

It has been Israel, however, that has done the most recent threatening. Arguing that diplomatic efforts and economic penalties have had no effect, hard-liners say a military strike may be the only alternative to stopping Iran from developing nuclear weapons.

Netanyahu, a proponent of such an option, made a direct appeal to American voters on Sunday to elect a president willing to draw a "red line" with Iran.

In the past week, Netanyahu has urged U.S. President Barack Obama and other world leaders to state clearly at what point Iran would face a military attack. But Obama and his top aides, while repeatedly saying that all options remain on the table, have pointed to shared U.S.-Israeli intelligence that suggests that Iran has not decided yet whether to build a bomb, despite pursuing the technology, and that there will be time for action beyond the toughened sanctions already in place.

Seeking to prove Israel wrong, and to blunt the possibility of a Middle East war, the U.S. and five other world powers are attempting to revive stalled high-level nuclear talks with Iran that were downgraded after a Moscow meeting in June ended without resolving a stalemate carried over from previous negotiations.

A Western diplomat told The Associated Press on Wednesday that U.S. Secretary of State Hillary Clinton would meet with the foreign ministers of Russia, China, Britain, France and Germany on Sept. 27 on the sidelines of the U.N. General Assembly. They are to review the results of talks Tuesday in Istanbul between EU foreign policy chief Catherine Ashton and top Iranian nuclear negotiator Saeed Jalili.

The diplomat, who demanded anonymity, said Jalili "expressed huge interest in the (negotiating) process" at that meeting. Ashton, in turn, said that the Iranians "have to move and make progress" on demands that they curb uranium enrichment that is above reactor fuel grade levels, particularly at their underground facility in Fordo, southwest of Tehran, which is most resistant to bomb and missile attacks

Iran has resisted any attempt to limit its enrichment activities, saying it has a right to enrich for peaceful purposes under the Nuclear Non-Proliferation Treaty.

In Istanbul earlier Wednesday, Jalili offered few concrete details about the meeting, but said he and Ashton had assessed "common points" reached by technical teams looking into the issue, and had discussed "what can be done for a new cooperation."

Beyond criticizing Iran for its nuclear defiance, the U.S. and Israel also accuse the Islamic republic of military support for Syrian President Bashar al-Assad. Chorev, the Israeli nuclear chief, said Wednesday that Iran's "fingerprints are manifested in Syria" in Assad's attempt to put down the increasingly violent insurgency, which has left more than 27,000 dead.

Like Iran, Syria is also under IAEA investigation for allegedly hiding a nuclear program. The probe was sparked by a 2007 Israeli airstrike that the U.S. says destroyed a nearly finished reactor that would have produced plutonium. Like enriched uranium, plutonium can be used to make warheads.

Denying any clandestine nuclear work, Bassam Sabbagh, Syria's chief IAEA envoy, took Israel to task for threatening Iran, its ally, and described the Jewish state's undeclared nuclear program as posing "a threat to the region's security and stability."

Israel hit back by saying Syria and its ally Iran were "known for their clandestine pursuit of nuclear weapons and other weapons of mass destruction."

Meanwhile, Middle East Quartet envoy Tony Blair told Israeli Labor party chairman Shelly Yachimovich that the Iranian threat was a "global issue."