The United States says Iran is lashing out at the world to "distract attention" from the damage that international sanctions are having at home.

Iran claimed Wednesday that it has achieved two major advances in its program to master production of nuclear fuel, a defiant move in response to increasingly tough Western sanctions over its disputed nuclear program.

Iran state media also reported steps to cut oil exports to six European countries in retaliation for new European Union sanctions, including a ban on Iranian oil.

In Washington, White House press secretary Jay Carney says such "defiant acts" show that Iran's leaders are under pressure.

The sanctions are intended to persuade Iran to back down. Iran has refused, although it signaled Wednesday that it is willing to return to talks.

In a further show of resistance to international pressure, state media reported Iran was taking steps to cut oil exports to six European countries in retaliation for new European Union sanctions, including a ban on Iranian oil.

The semi-official Mehr agency said that Iran has halted exports to France and the Netherlands, and has given an ultimatum to Italy, Spain, Portugal and Greece to either sign long-term contracts with Iran or be cut off. State-run Press TV had earlier reported that exports were being cut off outright for all six. The contradiction in the reports could not immediately been resolved.

The EU ban on oil imports is to go into effect in July. Iranian officials say their country's earlier cutoff will hit European nations before they can line up new suppliers, and that Tehran has already lined up buyers for the 18 per cent share of its oil that goes to Europe.

Warnings of attack

Iran's tough tone comes as tensions mount dramatically with Israel and the United States over its nuclear program, which Washington and its allies say is aimed at producing a nuclear weapon. Iran denies the charge, saying its program is intended solely for research and generating electricity.

Israel has increasingly warned of the possibility of a military strike on Iran's nuclear facilities, and it has accused Iran of being behind attempted attacks on Israeli diplomats in India, Georgia and elsewhere. Iran denies any role in the attacks, which have resembled recent bombing-assassinations of Iranian nuclear scientists that Tehran has blamed on Israel.

Iran's top nuclear negotiator on Wednesday formally notified the European Union's foreign policy chief that Tehran is willing to return to talks with the world powers on its nuclear program. Many in the West however feel that negotiations are a ploy to buy time.

Iran is meanwhile pushing ahead on what it says is a drive toward nuclear-self-sufficiency.

On Wednesday, President Mahmoud Ahmadinejad oversaw the insertion of the first Iranian domestically made fuel rod into a research reactor in northern Tehran, the country's official IRNA news agency reported.

Mastering entire cycle

Separately, the semiofficial Fars agency reported that a "new generation of Iranian centrifuges" had been installed and had gone into operation at the country's main uranium enrichment facility at Natanz in central Iran.

The moves were aimed at showing that Iran is mastering the entire cycle of producing nuclear fuel on its own. In the fuel cycle, mined uranium is processed into gas, then that gas is spun in centrifuges to purify it. Low-enriched uranium — at around 3.5 per cent — is used to produce fuel rods that power a reactor; however, the same process can be used to produce highly enriched uranium — at around 90 per cent purity — that can be used to build a warhead.

The Tehran facility where IRNA said the new fuel rods were installed is a research reactor intended to produce medical isotopes used in the treatment of cancer patients. It requires fuel enriched to around 20 per cent, considered a threshold between low and high enriched uranium.

Iran has been producing uranium enriched up to 5 per cent for years, and began enriching up to near 20 per cent in February 2010 after attempts at a deal with the West to import the fuel rods broke down. In January, Iran said it had produced its first such fuel rod. IRNA said the nuclear fuel rods were produced at a plant in Isfahan, central Iran.

Iranian officials have long spoken of introducing faster, more efficient centrifuges at the Natanz facility. The Fars news agency report did not give details on the advanced models that were installed.

Iran's Oil Minister Rostam Qassemi said several days earlier that Tehran could cut off oil exports to "hostile" European nations.

Washington levies new penalties

Members of Iran's parliament have been discussing a draft bill, although not finalized, which would cut off the flow to the European Union before the latest EU sanctions on Iran go into effect this summer.

Apart from the EU's recent measures on Iran, which include an oil embargo and a freeze of the country's central bank assets, Washington also recently levied new penalties aimed at limiting Iran's ability to sell oil — which accounts for 80 per cent of its foreign revenue.

Iran's unchecked pursuit of the nuclear program scuttled negotiations a year ago, but Iranian officials last month proposed a return to the talks with the five permanent UN Security Council members plus Germany.

IRNA news agency on Wednesday reported that Iran's top nuclear negotiator Saeed Jalili had written to the European Union's foreign policy chief Catherine Ashton, to formally announce its readiness to start those negotiations.

In the past, Iran has angered Western officials by appearing to buy time through opening talks and weighing proposals even while pressing ahead with the nuclear program.