Ali Asghar Soltanieh, Iran's Ambassador to the International Atomic Energy Agency, has said UN inspectors can 'fully monitor' uranium enrichment. (Hans Punz/Associated Press)

Members of the United Nations are calling for new sanctions against Iran after it made formal notification Monday that it would enrich uranium to higher levels.

Iran insists the move is meant only to provide fuel for its research reactor.

French Foreign Minister Bernard Kouchner accused Iran of "blackmail," according to media reports.

"Alas, we can't apply anything other than sanctions since negotiation is not possible," Kouchner is reported to have said.

“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,” U.S. Defence Secretary Robert Gates said at a media event in Rome on Sunday, one day before Iran made its official notification to the UN.

Iranian envoy Ali Asghar Soltanieh told The Associated Press that he informed the International Atomic Energy Agency of the decision to enrich at least some of its low-enriched uranium stockpile to 20 per cent, considered the threshold value for highly enriched uranium.

Soltanieh, who represents Iran at the Vienna-based IAEA, also said that the UN agency's inspectors now overseeing enrichment to low levels would be able to stay on site to fully monitor the process.

And he blamed world powers for Iran's decision, asserting that it was their fault that a plan that foresaw Russian and French involvement in supplying the research reactor had failed.

"Until now, we have not received any response to our positive logical and technical proposal," he said.

"We cannot leave hospitals and patients desperately waiting for radio isotopes" being produced at the Tehran reactor and used in cancer treatment, he added.

Soltanieh declined to say how much of Iran's stockpile — now estimated at 1.8 tons — would be enriched. Nor did he say when the process would begin.

On Sunday, Iranian officials said higher enrichment would start on Tuesday, but any reconfiguring of the centrifuge chains now enriching low enriched uranium is expected to take days, if not weeks.

Even before Iran's formal notification of the IAEA, some nations criticized the plan and suggested it would be met by increased pressure for new penalties on the Islamic Republic.

Iran has defied five UN Security Council resolutions — and three sets of UN sanctions — aimed at pressuring it to freeze enrichment, and has instead steadily expanded its program.

Iran's enrichment plans "would be a deliberate breach" of the resolutions, the British Foreign Office said.

In Berlin, Ulrich Wilhelm, the spokesman for German Chancellor Angela Merkel, said Germany and its allies were watching developments and were prepared to "continue along the path of raising diplomatic pressure."

Plans to produce drones

Also on Monday, Iran's defence minister announced his country has launched two production lines to build unmanned aircraft with surveillance and attack capabilities.

Iran also announced it will soon deploy a missile air defence system more powerful than the advanced Russian S-300 system Tehran ordered from Moscow in 2007 but has yet to receive.

Iranian Defence Minister Gen. Ahmad Vahidi, pictured here in Tehran in 2009, says the unmanned aircraft would be able to carry out surveillance and long-range offensive missions, state TV reported. (Vahid Salemi/Associated Press)

State television quoted Defence Minister Gen. Ahmad Vahidi as saying the unmanned aircraft would be able to carry out surveillance and offensive tasks with high precision and a long range. The two types of drones are named Ra'd (Thunder) and Nazir (Herald), with the former possessing attack capabilities.

Iran announced two years ago it had built an unmanned aircraft that Vahidi said had a range of more than 1,000 kilometres, long enough to reach Israel. It was not clear whether Ra'd and Nazir have such a range.

Iran frequently makes announcements about the strides being made by its military industries, but it is virtually impossible to determine independently the actual capabilities or combat worthiness of the weapons Iran is producing. The country began a military self-sufficiency program in 1992, under which it produces a range of weapons including tanks, medium-range missiles, jet fighters and torpedoes.

New air defence system 'soon'

Also on Monday, a senior air force commander, Gen. Heshmatollah Kasiri, told the official IRNA news agency that Iran will "soon" deploy an air defence system with capabilities matching, or superior to, those of the Russian S-300 system.

The S-300 missiles are capable of shooting down aircraft, cruise missiles and ballistic missile warheads at ranges of more than 145 kilometres and altitudes of over 27,000 metres.

Kasiri said Iran produces its entire air defence needs domestically, but he still criticized Russia for not delivering the S-300 missiles for "unacceptable reasons." Russia agreed in 2007 to sell the S-300 system to Iran, but the missiles have not been delivered. The delay has not been explained, but Israel and the United States have strongly objected to the deal.

The S-300 missiles would bolster Iran's air defences at a time when Israel refuses to rule out military action against Iranian nuclear sites. Israel and the West believe that Iran's nuclear program is geared toward developing nuclear weapons. Iran insists it is working on atomic power only for peaceful purposes.