Iran announced Monday that it has begun enriching uranium with 3,000 centrifuges, defiantly expanding a nuclear program that has drawn UN sanctions and condemnation from the West.

President Mahmoud Ahmadinejad said at a ceremony at the Natanz enrichment facility in central Iranthathis countrywas now capable of enriching nuclear fuel "on an industrial scale,"a termused to mean a capability to produce greater levels of nuclear fuel.

Asked if Iran has begun injecting uranium gas into 3,000 centrifuges for enrichment, top nuclear negotiator Ali Larijani replied, "Yes." He did not elaborate, but it was the first confirmation that Iran had installed the larger set of centrifuges after months of saying it intends to do so. Until now, Iran was only known to have 328 centrifuges operating.

Uranium enrichment can produce fuel for a nuclear reactor or the material for a nuclear warhead. The United States and its allies accuse Iran of intending to produce weapons, a charge the country denies.

Sean McCormack, the U.S. State Department spokesman, said the UN Security Council and theUN nuclear watchdog group "don't believe Iran's assurances that their [nuclear] program is peaceful in nature."

The U.S. White House also criticized the announcment.

"Iran continues to defy the international community and further isolate itself by expanding its nuclear program, rather than suspending uranium enrichment," said Gordon Johndroe, a spokesman for the National Security Council.

The UN International Atomic Energy Agency had no immediate comment following Monday's announcement.

The UN has vowed to ratchet up sanctions as long as Iran refuses to suspend enrichment. Its Security Council first imposed limited sanctions in December, then increased them slightly last month and has set a new deadline of late May.

In Tehran, some 200 students formed a human chain at Iran's Atomic Energy Organization while chanting "death to America" and "death to Britain." The students burnt flags of the U.S. and Britain.

Next step

On April 9, 2006, Iran announced it had first enriched uranium using an array of 164 centrifuges.Iran has said its next stepwas to set up 3,000 centrifuges.

Experts say the Natanz plant needs between 50,000 to 60,000 centrifuges to consistently produce fuel for a reactor or build a warhead.

In the enrichment process, uranium gas is pumped into a "cascade" of thousands of centrifuges, which spin the gas at supersonic speeds to purify it. Uranium enriched to a low level, at leastthree per cent, can be used as fuel, while at a far higher level, more than 90 per cent, it can be used to build a weapon.

Iran has two cascades of 164 centrifuges each operating at an aboveground portion of the Natanz facility. The two cascades have produced small quantities of non-weapons grade enriched uranium, UN nuclear inspectors have said.