The first principles discrete variational method and the local density approximation are used to calculate the electronic and magnetic properties of clusters of iron and nickel atoms representing the bcc iron-nickel alloy with nickel concentration up to about 30%. It is found that the presence of nickel atoms at sites neighbouring iron increases the iron local magnetic moment but decreases the magnitude of the magnetic hyperfine field The magnetic hyperfine field at the iron site increases with increasing number of nickel atoms at the next-nearest-neighbour sites. Consequently, the experimentally observed maximum in both magnetization and hyperfine field versus nickel concentration is attributed to different iron sites The 3d local densities of states at iron and nickel sites are calculated. The average density of states is found to remain unaltered for the majority sub-band, whereas it exhibits large deformation for the minority sub-band. An energy diagram is deduced from the density of states and is used to explain the formation of magnetic moment at iron and nickel sites. We deduce the following from these calculations. The observed increase in the local magnetic moment in the iron site is attributed to the reduction in the weight of the bonding d states and the accompanying constancy of the weight of the antibonding states, which ar driven by sd interaction.
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