* Russia says its agreements with IAEA now cover Crimea too
* Ukraine asks IAEA to avoid signalling recognition
* Agency says acts "in accordance" with international law
By Fredrik Dahl
VIENNA, March 28 (Reuters) - The U.N. atomic agency has got caught up in the diplomatic crossfire over Crimea as Russia insists its agreements with the Vienna-based watchdog now also cover the annexed Black Sea peninsula, a confidential exchange showed on Friday.
Ukraine, for its part, urged the International Atomic Energy Agency (IAEA) "to avoid any actions" which might be construed as recognition of Russia's annexation of the region.
Faced with the worst East-West confrontation since the end of the Cold War, the U.N. agency issued a cautious statement telling Russia it would "continue to implement safeguards in accordance with the IAEA statute and international law".
Reuters obtained the notes from Russia and Ukraine to the IAEA, along with its replies, shortly after they were sent to the Vienna-based organisation's member states.
Western diplomats interpreted the IAEA response as a setback for Moscow. There was no immediate comment from Russian diplomats or from the agency itself.
"I think it is definitely a rebuff (for Russia). The first thing that comes to mind with 'international law' is the United Nations General Assembly resolution which was clearly in Ukraine's favour," said one Western envoy.
The U.N. General Assembly passed a non-binding resolution on Thursday declaring invalid Crimea's Moscow-backed referendum this month on seceding from Ukraine, in a vote that Western nations said highlighted Russia's isolation.
The resolution says the General Assembly "calls upon all States, international organizations and specialized agencies not to recognize any alteration of the status" of Crimea and Sevastopol, which is home to Russia's Black Sea fleet.
A second senior Western diplomat accredited to the IAEA said the application of Russia's treaty obligations and international agreements extended only to its own territory.
"Crimea is still Ukrainian territory, even if occupied by foreign forces," the envoy said.
In its note dated March 26, Russia said its agreements with the IAEA "have been in effect since March 18, 2014, for the entire territory of the Republic of Crimea and the city of Sevastopol, as members of the Russian Federation".
None of Ukraine's 15 nuclear power reactors are in Crimea, but a Sevastopol university has a research reactor, which would likely be under some kind of IAEA monitoring.
The IAEA regularly visits civilian nuclear installations around the world to ensure there is no diversion of atomic material for military purposes.
As part of this programme, most of its 162 member states have so-called safeguards agreements with the IAEA, as well as related accords governing its inspections.
Like the world's other four recognised nuclear weapon states - the United States, France, Britain and China - Russia has a so-called 'voluntary offer' agreement with the IAEA, which is more limited in scope than the safeguards accords.
The IAEA is monitoring 31 nuclear-related facilities in Ukraine, IAEA Director General Yukiya Amano said this month.
The IAEA's website suggested Crimea had two research facilities, both at Sevastopol's University of Nuclear Energy and Industry, including a training reactor.
In a March 22 letter addressed to international organisations regarding the "illegitimacy" of Russia's annexation of Crimea, Ukraine's Foreign Ministry said:
"The Ukrainian side calls upon the international organisations to avoid actions and proceedings that might be interpreted as recognition of 'Republic of Crimea' as the Russian Federation territorial entity." (Editing by Gareth Jones)