Iran said this evening it had produced low-grade enriched uranium suitable for power stations and wanted to achieve industrial-scale production.
The UN has said Iran must halt uranium enrichment, a process Western nations fear Tehran wants to master so that it can develop nuclear weapons. Tehran insists its aims are entirely peaceful.
The United States, which has been leading the charge against Iran, said Tehran was "moving in the
Iranian President Mahmoud Ahmadinejad
wrong direction" with its nuclear programme and if it persisted, Washington would discuss possible next steps with the UN Security Council.
"I am officially announcing that Iran has joined the group of those countries which have nuclear technology. This is the result of the Iranian nation's resistance," Iranian President Mahmoud Ahmadinejad said in a televised address.
"Based on international regulations, we will continue our path until we achieve production of industrial-scale enrichment," he told officials and some ambassadors from regional states gathered in the northeastern city of Mashhad.
Iran's Atomic Energy Organisation head said earlier that Iran had enriched uranium to a level used in power plants, a major step forward in the country's nuclear programme.
"I am proud to announce that we have started enriching uranium to the 3.5 per cent level," Gholamreza Aghazadeh said, adding that the pilot enrichment plant in Natanz, south of Tehran, was now working.
Iran's announcement is a serious setback to UN Security Council efforts to have Tehran halt enrichment work and it could escalate a confrontation with Western powers leading to consideration of sanctions against the Islamic Republic.
White House spokesman Scott McClellan said Washington would "be talking about the way forward with the other members of the Security Council and Germany about how to address this" if Iran continued to move in its current direction.
The UN Security Council has demanded Iran shelve enrichment activity and on March 29 asked the International Atomic Energy Agency to report on its compliance in 30 days.
IAEA chief Mohamed El Baradei is expected to visit Iran later this week to seek full Iranian co-operation with the Council and IAEA inquiries. The announcement of advances in enrichment work casts an embarrassing cloud over that trip.
The IAEA had no immediate comment.