Iran announced Monday it had begun industrial scale nuclear fuel production in a fresh snub to the UN Security Council which has imposed two rounds of sanctions on Teheran for refusing to halt such work.

"I proudly announce that as of today Iran is among the countries which produce nuclear fuel on an industrial scale," President Mahmoud Ahmadinejad told a gathering at the Natanz uranium enrichment facility in central Iran.

Washington said Iran's latest move was "another signal" that Teheran was defying the international community's call to give up enrichment activities.

"It's a missed opportunity," State Department spokesman Sean McCormack said when asked about Iran's announcement. "This is another signal that Iran is defying the international community."

Western nations, led by the United States, suspect Iran's nuclear program is aimed at producing atomic weapons. Iran says the nuclear fuel will only be used to generate electricity.

Iran, which announced a year ago it had successfully produced its first batch of enriched uranium, has said it will install 3,000 centrifuges at Natanz as the first stage toward "industrial scale" fuel production.

Eventually it plans to have 54,000 of the machines which spin at supersonic speeds to produce fuel for nuclear reactors or, if enriched further, nuclear bombs.

With 3,000 centrifuges, Iran could make enough material for a bomb in one year, if it wanted, Western experts say.

Ahmadinejad vowed Iran would not bow to outside pressure to halt its nuclear program. "Iran has so far moved in a completely peaceful path and wants to continue following this path, they should avoid doing something which forces this nation to review its behavior."

The UN Security Council has passed two sanctions resolutions on Iran since December, targeting its nuclear and military sectors and severely impeding its financial transactions with the outside world.

"If they continue to pressure Iran over its peaceful nuclear activities we have no other choice but to follow parliament's order and review our membership of the NPT," said Ali Larijani, Iran's chief negotiator in the nuclear talks with the West.

Larijani, asked if Iran had started injecting gas into 3,000 centrifuges to enrich uranium being set up at the Natanz atomic site, said: "Yes we have injected gas."

(China Daily via agencies April 10, 2007)