Head of Iran's Atomic Energy Organization (IAEO) Ali Akbar Salehi said on Tuesday that Iran began to produce 20 percent enriched uranium at a Natanz facility, the official IRNA news agency reported.

"From today we started the 20 percent (uranium) enrichment in a separate cascade in Natanz (nuclear enrichment facility)," Salehi was quoted as saying by the IRNA.

Meanwhile, local English-language Press TV reported that Iran on Tuesday began enriching uranium to a level of 20 percent at its Natanz enrichment facility under the surveillance of inspectors from the international nuclear watchdog.

On Sunday, Iranian President Mahmoud Ahmadinejad ordered the IAEO to start work on enriching uranium to a purity of 20 percent. Ahmadinejad also said that Iran is still ready for exchange of nuclear fuel with world powers.

On Monday, Iran handed over a letter to the International Atomic Energy Agency (IAEA) informing it about the Islamic Republic's plan to produce 20 percent enriched uranium, provoking fresh warnings by France and the United States of new sanctions.