Western diplomats said on Wednesday that the International Atomic Energy Agency (IAEA) has concluded that Iran installed 350 new centrifuges at the Fordow underground facility since February. The diplomats said, according to reports in the Israeli media, that the IAEA will reveal this information in a new report to be released on Friday. The installation of more centrifuges has increased the Islamic Republic’s potential to enrich uranium. The remarks were made after Iran and the P5+1 traded proposals in Baghdad on Wednesday, as a new round of talks over Tehran's controversial nuclear program got underway. Iran is keen to ease sanctions on its vital oil ministry and central bank by Western nations, who have said they are unwilling to give up their key leverage point without a comprehensive agreement. Ahead of talks the P5+1 - the five permanent members of the UN Security Council plus Germany - indicated they may be willing to limit their demands to Tehran halting enrichment to 20%, shipping all uranium enriched to 20% out of the country, and closing the highly fortified Fordow facility. The Islamic Republic admitted last year it was moving more centrifuge machines for enriching uranium to the underground facility, which is carved into a mountain to protect it against possible attacks. The existence of the facility near Qom only came to light after it was identified by Western intelligence agencies in September 2009. The UN’s nuclear watchdog has confirmed that Iran begun enriching uranium at the plant. In March, IAEA chief Yukiya Amano said that a tripling on the enrichment of uranium at the Fordow nuclear site, along with Iran’s rejection of IAEA attempts to inspect nuclear facilities, point to concern that the Islamic Republic might be developing nuclear capability for other than peaceful purposes. On Tuesday, it was reported that Iran will sign an agreement to cooperate with the IAEA nuclear watchdog agency. Yukiya Amano, director general of the International Atomic Energy Agency, returned to Vienna after a one-day visit to Tehran and announced that “a decision was made to conclude and sign the agreement. I can say it will be signed quite soon." Foreign Minister Avigdor Lieberman expressed skepticism over the agreement, saying the Iranians are trying to create a more pleasant and relaxed atmosphere during negotiations but that their goal remains the same - to obtain nuclear weapons. “While sanctions on Iran have an impact, it is not enough of an impact to bring a real change in the situation,” Lieberman said. “We should also pay attention to the negative Iranian involvement in every possible place in the Middle East.” Earlier, Defense Minister Ehud Barak also expressed doubt over the value of an agreement between the IAEA and Iran. “It appears that the Iranians are trying to reach a ‘technical agreement’ which will create the impression of progress in the talks, in order to remove some of the pressure before the [P5+1] talks tomorrow in Baghdad; as well as to put off the intensification of sanctions,” Barak said.