KHONDAB, Iran, AP -As the U.S. and Europe struggle to stop Iran”s uranium development, the Iranians are pushing ahead on another track — construction of a heavy-water reactor that Iran says will be used only for peaceful purposes but which could also produce plutonium for a nuclear bomb.

It will take at least another four years for Iran to complete the reactor, making it a less immediate worry for the West than the uranium program, parts of which are either in operation or ready to go at a moment”s notice.

But ultimately, the heavy-water reactor could prove more dangerous, since bombs made with plutonium are smaller and easier to fit onto a ballistic missile.

In a comprehensive package aimed at reining in Iran”s nuclear program, Europe proposed that it give up the heavy-water project in return for a light-water reactor, seen by arms control experts as easier to monitor to ensure it”s not being used for weapons.

Iran — which says its nuclear program is peaceful — rejected the entire package this week. The head of Iran”s Atomic Energy Organization called the heavy-water reactor offer a &#34joke.&#34

&#34We have developed this capability. The heavy-water project today is a reality,&#34 Gholamreza Aghazadeh, who is also vice president, said on state-run television. &#34This knowledge belongs to Iran. Nobody can take it from us. As they (Europeans) see Iran”s determination, they will be forced to show flexibility and accept it.&#34

While Iran has agreed to suspend parts of its uranium program as a gesture in negotiations with Europe, it has repeatedly rejected European calls for it to freeze the heavy-water project, which is moving full steam ahead.

&#34Work has not been halted there even for a day, allowing Iran to constantly advance its heavy-water project,&#34 lawmaker Rasoul Sediqi Bonabi told The Associated Press on Friday. Bonabi, a nuclear scientist, said Iran developed the plant because the world would not give it &#34a drop of heavy water.&#34

Iran says the heavy-water reactor will have a range of peaceful applications. Iran intends to use the facility in the pharmaceutical, biological and biotechnological fields as well as in cancer diagnosis and control.

Iran insists its nuclear program is aimed only at producing electricity, but the United States accuses it of secretly intending to build nuclear weapons. Europe is trying through negotiations to persuade Iran to give up technology that can be used for military purposes and limit its program to possessing reactors using fuel provided from abroad.

The 40-megawatt heavy-water reactor could produce enough plutonium for a nuclear weapon each year, an amount experts commonly say is 8.8 pounds.

The reactor — ringed with anti-aircraft guns as are all of Iran”s nuclear facilities — is being built at the foot of a mountain in the deserts outside the small town of Khondab, 60 miles northwest of the central city of Arak.

Construction began in 2004 and is expected to be completed by 2009. Most Iranian nuclear facilities have portions built underground to protect them from airstrike — and Aghazadeh suggested that an underground portion may be built at Khondab as well.

&#34This knowledge belongs to us. It (the knowledge) won”t be destroyed if attacked. Equipment could also be moved under the mountain,&#34 he said.

A plant next door began producing heavy water for the reactor last year, using water from the nearby Qara-Chai River. It produces 16 tons of heavy water a year, putting it on track to have the 90 tons needed by the time the reactor is finished.

Inspectors from the International Atomic Energy Agency, the U.N. nuclear watchdog, visited the Khondab facility in February 2003.

North Korea followed a similar two-track process in its nuclear program, which it overtly says aims to produce weapons. In 1994, it signed a deal with the United States freezing its plutonium program, but in 2003 it was discovered that North Korea was secretly building a uranium program.

Nuclear weapons can be produced using either plutonium or highly enriched uranium as the explosive core. Either substance can be produced in the process of running a reactor.

Uranium is enriched by turning the raw ore into gas, which is then spun in centrifuges. If it is enriched to a low level, it can be used as fuel for a reactor; at a high level, it can be used for a bomb.

Iran”s enrichment program is at an advanced stage, with thousands of centrifuges ready to start working. While Iran is continuing its suspension of enrichment, it ended its freeze this week on the first step in the process — turning raw uranium into gas — bringing a sharp rebuke from Europe.

Reactors fueled by enriched uranium use regular — or &#34light&#34 — water as a &#34moderator&#34 in the chain reaction that produces energy. The Khandub reactor, however, uses &#34heavy water,&#34 which contains a heavier hydrogen particle. That allows the reactor to run on natural uranium mined by Iran, forgoing the expensive process of enrichment.

The spent fuel from a heavy-water reactor can be reprocessed to extract plutonium for use in a bomb.