Iran has resumed work on its nuclear fuel programme, in a move that could see it being referred to the UN Security Council for possible sanctions.
At the conversion facility near Isfahan, workers positioned the first barrel of uranium yellow cake and fed it into the processing line.
After two years of talks, Tehran has formally rejected a European Union package of political and economic incentives.
It described the proposal to persuade it to stop converting uranium as “very insulting and humiliating”.
Earlier, officials from the International Atomic Energy Agency fitted more surveillance cameras in an area used for preliminary conversion of raw uranium.
However Iran is stressing that it has not restarted work on the most sensitive element of the nuclear fuel cycle – uranium enrichment – a process that can be used to make reactor fuel or atomic warheads.
The decision to restart work at Isfahan is likely to land Iran in hot water at an emergency meeting of the UN’s Atomic watchdog in Vienna on Tuesday.
Meanwhile, the new Iranian President Mahmoud Ahmadinejad met his Syrian counterpart Bashir al Assad earlier.
Iran denies US accusations that its nuclear programme is a front for making bombs, saying instead it needs an alternative energy source to meet demands for electricity.