Iran has begun installing 6,000 new centrifuges at its uranium enrichment plant, President Mahmoud Ahmadinejad said, defying the West which fears Tehran is trying to build nuclear bombs.
The United States said the move showed once again that Tehran intended to ignore UN Security Council demands to halt sensitive nuclear work and France suggested major powers may have to toughen sanctions on the Islamic Republic.
The Security Council has imposed three rounds of limited sanctions since 2006 on Iran for refusing to stop enriching uranium, which can be used as fuel in power plants or provide material for nuclear weapons if refined much further.
Iran, the world's fourth largest oil exporter, says it wants nuclear power to generate electricity to meet booming demand.
"Today we have started the installation of 6,000 new centrifuges," the official IRNA news agency quoted Mr Ahmadinejad as saying during a visit to Natanz in central Iran yesterday.
He later told a televised event to mark Iran's National Day of Nuclear Technology that Tehran had defeated its Western foes.
"They imagined that by imposing political pressure and sanctions, Iran's economy will fall apart but we saw that this did not happen."
US.Secretary of State Condoleezza Rice said incentives offered to Iran in 2006 if it halted uranium enrichment, including civil nuclear cooperation, had been "very generous."
"Iran faces the continued isolation in the international community because it will not take a reasonable offer from the international community," she said in Washington.
But Foreign Minister Sergei Lavrov of Russia, which is building Iran's first nuclear power plant, told Ekho Moskvy radio that "new positive proposals" should be put to Iran, without specifying what they might be.
The United States, Britain, France, Germany, Russia and China issued a joint statement last month saying they were ready to "further develop" the package of incentives offered to Iran in 2006 if Tehran halts enrichment.
The United States has not ruled out military action to stop Iran's nuclear activities and Israeli government spokesman Mark Regev urged the international community to stop Tehran's "aggressive" atomic work.