ISLAMABAD, June 21: Satellite images show that Pakistan is building a new nuclear reactor that can produce weapons-grade plutonium, an American watchdog group alleged on Thursday, warning that it could contribute to an atomic arms race with India.

A picture taken on June 3 shows work progressing rapidly on the reactor at the Khushab nuclear site, 170kms southwest of Islamabad, the Institute of Science for International Security said.

The development of the reactor and other nuclear-related activities `imply’ that Pakistan has decided to `increase significantly its production of plutonium for nuclear weapons’, the Washington-based institute said in a report analysing the images.

A senior official at the Pakistan Atomic Energy Commission said the country was `extending our infrastructure’, but declined to address the details of the report.

“We are a declared nuclear state and we are pursuing our nuclear program for peaceful purposes,” said the official. “We are doing it for our national interests.”

The report, co-authored by former UN inspector David Albright, said Pakistan may have decided to produce more plutonium for lighter warheads for cruise missiles, or to upgrade weapons aimed at Indian cities.

Most Pakistani nuclear weapons use highly enriched uranium, it noted.

David Albright said the work on the reactor shows that the country is trying to improve its nuclear capabilities with a `new generation’ of plutonium-based weapons.

Plutonium-based weapons pack more explosive power into smaller, lighter packages than those made with uranium, which Pakistan has been using for years, according to Albright.

“The work on these reactors reflects a Pakistani decision to create a new generation of nuclear weapons. By going plutonium ... we have to interpret that as an attempt to make smaller, more powerful weapons that are going to be more destructive in India,” Albright said in a telephone interview.

The report accused the US government of soft-pedalling the risk to avoid endangering Islamabad's cooperation against terrorism and a proposed nuclear pact with New Delhi.

The institute said it used satellite imagery to conclude that Pakistan was building a third nuclear reactor at Khushab.—AP