EXCLUSIVE-Bahrain, UAE probe suspicious shipments headed to Iran

* Iran shipments may have violated U.N. sanctions

* Seized items may have been for nuclear program - envoys

* Moves by UAE, Bahrain show Iran is more isolated - envoys

* Bahrain seized material usable in advanced centrifuges

UNITED NATIONS, Sept 18 (Reuters) - Bahrain and the United

Arab Emirates have confiscated a number of items Iran may have

sought for its nuclear program, a development that diplomats

said showed how enforcement of U.N . sanctions ag ainst Tehran is

steadily improving.

One of the items heading to Iran but confiscated by Bahrain

was carbon fiber, the diplomats told Reuters, a dual-use

material U.N. experts have said would be crucial if Iran was to

develop more advanced nuclear enrichment centrifuge technology.

Bahrain's and UAE's confidential reports to the U.N.

Security Council's Iran sanctions committee are politically

significant, envoys said on condition of anonymity, since they

highlight how more and more states are enforcing the sanctions

and making it increasingly difficult for Tehran to flout them.

"The fact that these two countries are now taking steps to

enforce the sanctions and reporting those steps to the U.N. is

remarkable by itself," a senior Security Council diplomat told

Reuters. "It shows that the U.N. sanctions regime can work. UAE

has been one of Iran's enablers. Iran's becoming more isolated."

Israeli Prime Minister Benjamin Netanyahu said on Sunday

that Tehran was close to being able to build a nuclear bomb, and

U.S. President Barack Obama is under pressure ahead of

November's election from political opponents who argue that

sanctions are not doing enough to stop Iran building a bomb.

The emirate Dubai has long been one of Iran's main transit

hubs because of its busy port and position as a key financial

center. Th e Carnegie Endowment for International Peace

think-tank wrote in July 2011 th at Dubai was "a top source of

Iranian imports and a key transshipment point for goods - legal

and illegal - destined for the Islamic Republic."

But pressure from the United States and other Western powers

to crack down on Iranian sanctions violations has borne some

fruit in the form of redoubled efforts to enforce the sanctions

and report to the sanctions committee, Western envoys say.

The Security Council imposed four rounds of U.N. sanctions

on Tehran between 2006 and 2010 to punish it for defying

Security Council demands that it suspend uranium enrichment and

other sensitive nuclear activities.

Tehran rejects charges it is developing the capability to

produce atomic weapons. Iran says its nuclear program is

intended solely for the peaceful production of electricity.

UAE officials insist that the country's policy has always

been to fully abide by U.N. regulations and cooperate with the

sanctions committee. A UAE official who declined to be

identified played down the reports to the Iran committee.

"All incidents were reported at the time when they happened,

and there has been no incident in more than a year," the

official told Reuters. He did not comment further.

Bahrain's mission to the United Nations in New York did not

reply to a request for comment, and officials in Bahrain were

not immediately available to comment.

CARBON FIBER

Bahrain has become increasingly annoyed with what it says

are attempts by Iran to undermine its government. The Sunni-led

island, along with fellow Gulf Arab countries, have accused

Shi 'ite-led Ira n of bei ng behind the unrest in the region.

Tehran denies fomenting problems in Bahrain.

U.N. diplomats say that some countries could also do more to

enforce the sanctions. They say it is important for China,

Russia, India, Turkey and others to counter Iranian attempts to

use their territory to circumvent international sanctions.

The UAE reported to the council's Iran sanctions committee

that it had made some 15 interceptions of suspicious items bound

for Iran over the last three years, diplomats said.

"Some of those items have been cleared as OK but some remain

under investigation," a U.N. diplomatic source told Reuters.

Diplomats said that reports from the UAE, Bahrain and other

countries would likely be mentioned in a briefing later this

week for the 15-nation council by Colombia's U.N. envoy Nestor

Osorio, who chairs the Iran sanctions committee.

Osorio's report was expected to leave out the names of the

countries that submitted reports to the committee in keeping

with council tradition on such delicate matters, envoys said.

In some cases, the UAE returned seized items to the original

shipping countries, diplomats said. Among the firms involved in

the procurement efforts the UAE uncovered was Kalaye Electric

Co. in Tehran, the former center of Iran's enrichment centrifuge

research and development program, envoys said.

There were no details available on the items confiscated by

UAE authorities, but the three items Bahrain intercepted

included carbon fiber, a dual-use material that the U.N. expert

panel identified in a May 2012 report as key for the further

development of Iran's uranium enrichment centrifuge program.

It remains unclear if Iran wanted the carbon fiber for its

nuclear program, diplomats said.

The last round of U.N. sanctions adopted in June 2010

established the panel of experts to monitor compliance with the

U.N. measures and gave countries the authority to inspect all

cargo going to and from Iran and seize any banned items.

The United States and European Union have also imposed their

own much more draconian sanctions.

(Additional reporting by Andrew Torchia in Dubai; Editing by

Claudia Parsons)