Iranian president Mahmoud Ahmadinejad has set his sights on enriching his country’s uranium stockpiles.
Speaking at a laser technology exhibition, he told state media that production of high grade nuclear reactor fuel will begin on Tuesday.
It will be used to power a medical research reactor in Tehran, but will also bring the country closer to producing weapons grade fuel.
The move has infuriated the West, which has long been concerned about Iran’s uranium stockpiles and remains unconvinced its nuclear ambitions are as innocent as Ahmadinejad claims.
Major powers like China and the US had hoped to persuade Iran to agree to hand over low grade uranium in exchange for nuclear fuel which can not be used for weapons.
The US Defence Secretary, Robert Gates, spoke of his frustration at Iran’s actions.
“If the international community will stand together and bring pressure to bear on the Iranian government, I believe there is still time for sanctions and pressure to work,” he said.
The US has stressed that any increased sanctions will be targeted at the Iranian government, not the Iranian people.