Iran's president has called Tehran's decision to enrich uranium up to 60% "an answer to your evilness", after saboteurs attacked a nuclear site in the country.
His comments link the incident to ongoing talks in Vienna over its tattered nuclear deal with world powers.
Israel hasn't commented on the attack but is widelysuspected of carrying out this weekend's assault at the Natanz nuclear facility - part of an escalating shadow war between the two countries.
The escalation in enrichment could see further retaliation as Israeli Prime Minister Benjamin Netanyahu has vowed never to allow Tehran to obtain a nuclear weapon. His country has twice preemptively bombed Mideast nations to stop their atomic programs.
Speaking to his Cabinet, an impassioned President Hassan Rouhani said the damaged first-generation IR-1 centrifuges at Natanz would be replaced by advanced IR-6 centrifuges that enrich uranium much faster.
"You wanted to make our hands empty during the talks but our hands are full," Rouhani said.
He added: "60% enrichment is an answer to your evilness. ... We cut off both of your hands; one with IR-6 centrifuges and another one with 60%."
'Peaceful nuclear programme'
Iran announced Tuesday it would enrich uranium to its highest level ever in response to the weekend attack at Natanz. That also includes adding another 1,000 "more advanced" centrifuges there as well.
Officials initially said the enrichment would begin Wednesday a tweet early in the morning that day from Iran's envoy to the International Atomic Energy Agency, Kazem Gharibadadi, suggested it might come later.
He wrote the enrichment would be handled by only two cascades of IR-4 and IR-6 centrifuges at Natanz. A cascade is a group of centrifuges working together to enrich uranium more quickly.
"Modification of the process just started and we expect to accumulate the product next week," Gharibadadi wrote.
Iran insists its nuclear programme is peaceful, though the West and the IAEA say Tehran had an organised military nuclear program up until the end of 2003.
However, the Iran nuclear agreement - a landmark accord reached between Iran and several world powers, including the United States, in July 2015 - prevented it from having enough of a uranium stockpile to be able to pursue a nuclear weapon.
An annual US intelligence report released Tuesday maintained the American assessment that "Iran is not currently undertaking the key nuclear weapons-development activities that we judge would be necessary to produce a nuclear device."
The talks in Vienna are aimed at reviving America's role in the agreement, which former President Donald Trump abandoned, and lifting the sanctions he imposed.
Rouhani in his comments on Wednesday insisted Iran still seeks a negotiated settlement in Vienna over its program.
"The US should return to the same conditions of 2015 when we signed the nuclear deal," he said.
Iran had previously said it could use uranium enriched up to 60% cent for nuclear-powered ships. However, the Islamic Republic currently has no such ships in its navy. The IAEA has confirmed that Iran informed it of its plans to enrich up to 60%.
Iran had been enriching up to 2% — and even that was a short technical step to weapons-grade levels of 90%.
The weekend attack at Natanz was initially described only as a blackout in the electrical grid feeding above-ground workshops and underground enrichment halls — but later Iranian officials began calling it an attack.
Alireza Zakani, the hard-line head of the Iranian parliament's research centre, referred to "several thousand centrifuges damaged and destroyed" in a state TV interview.
However, no other official has offered that figure and no images of the aftermath have been released..