Iran adds batch of fuel to reactor -nuclear chief

* Iran says fuel is for medical purposes

* Iran nuclear agency head says nuclear talks to continue

DUBAI, July 22 (Reuters) - Iran has sent a new batch of enriched uranium to fuel a medical research reactor in its capital, the country's nuclear chief said on Sunday, an indication Tehran is digging in as its standoff with world powers over the enrichment continues.

Fereydoon Abbasi-Davani, the head of Iran's Atomic Energy Organization, said a fourth batch of 20-percent enriched fuel produced inside Iran has now arrived at the Tehran Medical Research Reactor, according to the Mehr news agency.

Iran says the reactor produces medical isotopes used to treat cancer patients. Western powers believe Iran is stockpiling enriched uranium as potential fuel for nuclear weapons.

A third round of talks between Iran and six major world powers in Moscow ended last month without any agreement. United Nations Security Council resolutions require Iran to halt all enrichment of uranium, while Iran insists it has the right to some enrichment under the Nuclear Non-Proliferation Treaty.

Iran has said it is willing to negotiate on its enrichment to 20 percent, which is much closer to the weapons-grade uranium needed for an atomic bomb.

Abbasi-Davani said Iran will continue with the stalled talks.

"We welcome talks in any situation," Mehr quoted him as saying. "We have strongly defended our stance and will continue with talks until we reach a logical solution."

Technical experts for the two sides are due to meet again in late July in an effort to salvage diplomacy meant to resolve the decade-old dispute.

Iranian lawmakers said this month that the government should consider equipping Iran's naval and research fleet with "non-fossil-fuel" engines, in an apparent reference to nuclear fuel.

Such nuclear fuel is refined to a level that would also be suitable for the explosive core of a nuclear warhead, stoking fears that Iran would use such a programme as a pretext for more sensitive atomic activity.

But Abbasi-Davani, who survived an assassination attempt two years ago which Iran has blamed on foreign intelligence agencies, denied the Islamic Republic had such a plan.

"At the moment we do not have any specific plan to do such a thing," Mehr quoted him as saying.

"Certainly if we ever wanted to do such a thing, we would cooperate with the International Atomic Energy Agency so that at the needed time, they can provide us with the fuel."

(Reporting By Yeganeh Torbati; Editing by Michael Roddy)