Prime Minister Stephen Harper has called the latest revelation of Iran's nuclear technology a "grave threat to international peace and security."

Harper made the comment on Friday after the existence of a second uranium enrichment facility in Iran became public.

"Iran, the combination of its abhorrent ideology and its interest in nuclear technology, combined with increasing evidence of its obvious disregard for international law and for its obligations, constitutes a grave threat to international peace and security," Harper said at a closing news conference at the G20 meetings in Pittsburgh.

"We will work closely with our allies in the international community to encourage effective and reasonable responses to that threat."

Iranian President Mahmoud Ahmadinejad insisted the country has not kept the enrichment facility secret and is working within the guidelines of the UN nuclear watchdog.

Iranian President Mahmoud Ahmadinejad says Iran has "no secrecy." (Vahid Salemi/Associated Press)But in a news conference Friday in New York, Ahmadinejad dodged a question about whether Iran had enough enriched uranium to make a nuclear weapon, instead saying Tehran rejects such armaments as "inhumane."

He said the new facility won't be operational for 18 months and Iran has not violated any requirements of the International Atomic Energy Agency. The Iranian president claimed the rules require that the agency be informed of any new enrichment facility six months before it becomes operational.

But the IAEA has said Iran is obliged to notify the agency when it begins designing such facilities.

The leaders of the United States, France and Britain announced Friday morning they have disclosed intelligence information to the IAEA that confirms an underground nuclear facility has been built into the side of a mountain near Qum and demanded an in-depth investigation.

Must be 'held accountable': Obama

Iran's decision to start building the nuclear facility years ago, without notifying the IAEA represents a direct challenge to the non-proliferation regime, U.S. President Barack Obama said Friday at the G20 meetings.

An employee works at the fuel manufacturing plant at a uranium conversion facility in Natanz, south of Tehran. (Caren Firouz/Reuters)Tehran must "be held accountable to international standards and international law," Obama said.

Iran did not disclose existence of the facility, 160 kilometres southwest of Tehran, to the IAEA until Monday after Tehran reportedly became aware that Western intelligence had already discovered it.

The size and configuration of the facility is inconsistent with a peaceful nuclear program and the IAEA must immediately investigate it, Obama said.

"When we find that diplomacy does not work, we will be in a much stronger position to, for example, apply sanctions that have bite," he said. "That's not the preferred course of action. I would love nothing more than to see Iran choose the responsible path."

"The international community has no choice today but to draw a line in the sand," said British Prime Minister Gordon Brown.

The facility presents "a challenge made to the entire international community," said French President Nicolas Sarkozy. " We cannot let Iranian leaders gain time while the motors are running."

The UN Security Council unanimously approved a U.S.-sponsored resolution Thursday calling on states with nuclear weapons to rid themselves of their deadly stockpiles to prevent the spread of nuclear weapons, reduce the risk of nuclear terrorism and promote disarmament.

IAEA told on Monday

Iran informed IAEA chief Mohamed ElBaradei by letter on Monday that "a new pilot fuel-enrichment plant is under construction," agency spokesman Marc Vidricaire said.

Iran's letter contains no details about the facility's location, whether operations have started or what type of centrifuges it will use, according to the IAEA.

Iranian officials had previously acknowledged having only one enrichment plant — which is under IAEA monitoring — and had denied allegations of undeclared nuclear activities.

A U.S. official who spoke to The Associated Press on the condition of anonymity said the facility has 3,000 centrifuges that could be operational by next year.

United Nations officials familiar with IAEA monitoring of Iran's nuclear activities had previously said Iran might have undeclared enrichment plants with the state-of-the-art centrifuges that enrich more quickly and efficiently than Iran's mainstay P-1 facility, a decades-old model based on Chinese technology.

The IAEA has requested that Iran provided specific information regarding the newly revealed facility, Vidricaire said.

Meeting in Geneva

The Islamic republic insists it has a right to enrich uranium to generate fuel for what it says will be a nationwide chain of nuclear reactors. But because enrichment can make both nuclear fuel and weapons-grade uranium, the international community fears Tehran will use the technology to generate the fissile material used in nuclear warheads.

Iran, the five permanent UN Security Council members and Germany are scheduled to discuss nuclear programs on Oct. 1 in Geneva.

At the meeting, Iran must demonstrate it is "prepared to co-operate fully and comprehensively with IAEA to take concrete steps to create confidence and transparency in its nuclear program," Obama said.

If there is no change in Iran's dealing with its nuclear program by December, sanctions will be placed against the country, Sarkozy said. "This is for peace and stability," he said.

Beyond sanctions, the leaders' options are limited and perilous. Military action by the United States or an ally such as Israel could set off a dangerous chain of events in the Islamic world.

With files from The Canadian Press and The Associated Press