Iran on Tuesday announced it was removing seals from nuclear facilities and told the International Atomic Energy Agency (IAEA) that it wants to enrich uranium on a “small scale” at its plant in Natanz.
Expressing “serious concern” IAEA chief Mohamed ElBaradei confirmed the removal of seals from the Natanz plant and said the process was due to be completed on Wednesday at two other sites, Pars Trash and Farayand Technique.
The IAEA has previously called on Iran not to resume nuclear research, which was voluntarily suspended in 2003.
UN referral considered
European and American leaders condemned the breaking of seals and say they will consider referring Iran to the UN Security Council, which can impose international sanctions.
Britain, France and Germany, the so-called EU-3 that have been seeking to negotiate with Iran over its nuclear program, planned to meet on Thursday to discuss the latest development.
British Foreign Secretary Jack Straw said referring Iran to the UN Security Council would "top the agenda" at their talks.
He voiced "profound concern" at Iran's move, a sentiment echoed in Paris and Berlin.
German Foreign Minister Frank-Walter Steinmeier said Iran had "crossed a line where the Iranians knew that it would not remain without consequences."
The White House threatened referral to the Security Council if Iran failed to keep its international obligations and did not show a willingness to negotiate with the EU-3.
Gregory Schulte, the US ambassador to the IAEA, said Iran "continues to choose confrontation" and "shows its disdain for international concern and its rejection of international diplomacy”.
Europe and the US fear that Iran's nuclear program could be a cover for developing atomic weapons, a charge Iran strongly refutes, saying is it for civilian purposes only.
Russia has also appealed to Iran to "maintain the moratorium" on enrichment activities, Russian Foreign Minister Sergei Lavrov said.
Iran has up to now rejected a Russian compromise deal to enrich Iranian uranium on Russian soil.
Enrichment fears
Iran signed an agreement with the European Union in November 2003 to suspend all activities linked to enrichment.
But formal talks ceased last August when Tehran resumed uranium conversion, a final step before enrichment.
Enriched uranium can be used to produce electricity as well as provide the basis for nuclear weapons.
Mark Fitzgerald, a non-proliferation expert with London's International Institute for Strategic Studies (IISS), said Natanz has 164 centrifuges for uranium enrichment.
Even if these centrifuges cannot produce enough uranium to make a bomb, "by mastering that technology" Iran "would pass a point of no return in as much as it could then replicate this kind of (centrifuge) cascade... in a clandestine, non-reported facility," he said.
Secret program
However, an exiled Iranian opposition figure has claimed that Iran has secretly built thousands of centrifuge machines for its nuclear plant at Natanz.
The claims by Alireza Jafarzadeh, citing what he said was intelligence from the opposition and sources within the Iranian nuclear program, could not be independently verified, but if confirmed would likely enflame the standoff.
"Iran has already manufactured as many as 5,000 centrifuge machines ready to be installed in Natanz, which is a clear breach of its agreements with the IAEA and the EU," Mr Jafarzadeh, former spokesman for the National Council of Resistance of Iran, told reporters in the US.
He said Iran had been continually building underground centrifuge cascade installation platforms at Natanz which could be used for enriching uranium on a large scale.
He said that work at Natanz was now so advanced that construction could be finished by the middle of this year.
"The 5,000 centrifuge machines are going to be installed in underground cascade halls. All of this has been going on while supposedly the program has been under freeze," he said.
Mr Jafarzadeh said military companies linked with the Iranian Revolutionary Guard had built most of the alleged centrifuge parts but he could not pinpoint their location.
Robert Einhorn, an independent expert at the Center for Strategic and International Studies said that while Mr Jafarzadeh’s information in the past had shed light on Iran’s nuclear program, the latest claim needed to be backed up with “specific information on the whereabouts of the manufacture of these 5,000 centrifuge machines".
'No attack plans'
A White House spokesman said US President George W Bush had no plans to attack Iran over its controversial nuclear program, saying the US remained committed to diplomacy with Iran, but the military option remained on the table.
"The president made it pretty clear, he said previously that Iran is not Iraq," Scott McClellan told reporters when asked if Washington might use force against Iran.
But he added that if Iran breaches its international obligations, "there's no other choice but to refer the matter" to the UN Security Council for possible sanctions.