VIENNA (Reuters) - Japan told the U.N. atomic watchdog there was an initial increase in radioactivity around a quake-hit nuclear plant on Saturday but levels "have been observed to lessen in recent hours," the Vienna-based agency said.

The International Atomic Energy Agency (IAEA) said it had also been informed by Japanese authorities that Saturday's explosion at the Fukushima Daiichi plant occurred outside the primary containment vessel, not inside.

"The plant operator, Tokyo Electric Power Company (TEPCO), has confirmed that the integrity of the primary containment vessel remains intact," it said in a statement that is likely to be seen as positive for efforts to contain the damage.

An explosion severely damaged the main building of the plant earlier on Saturday in the wake of the massive earthquake, causing radiation to leak from the facility, 240 km (150 miles) north of Tokyo.

The government insisted radiation levels were low, saying the blast had not affected the reactor core container.

Japan has reported that four workers at Fukushima Daiichi were injured by the explosion, the IAEA said.

It said about 140,000 people have so far been evacuated from areas near Fukushima Daiichi and another nuclear power plant.

"Evacuations around both affected nuclear plants have begun," the statement said.

In a 20-km radius around Fukushima Daiichi an estimated 110,000 people have been evacuated. In a 10-km radius around Fukushima Daini about 30,000 people have been evacuated.

"Full evacuation measures have not been completed," the IAEA said.

Japan's nuclear safety agency earlier said the nuclear accident was less serious than both the Three Mile Island accident in 1979 and the 1986 Chernobyl nuclear disaster.

Workers pumped sea water into the reactor to cool it.

"As a countermeasure to limit damage to the reactor core, TEPCO proposed that sea water mixed with boron be injected into the primary containment vessel," the IAEA said.

"This measure was approved by Japan's Nuclear and Industrial Safety Agency (NISA) and the injection procedure began at 20:20 local Japan time."

The blast at the nuclear plant raised fears of a meltdown at the power facility, but experts said Japan should not expect a repeat of Chernobyl.

The U.N. agency statement said NISA had confirmed the presence of caesium-137 and iodine-131 in the vicinity of Fukushima Daiichi Unit 1.

"NISA reported an initial increase in levels of radioactivity around the plant earlier today, but these levels have been observed to lessen in recent hours," the IAEA said.

(Editing by Janet Lawrence)

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