Iran has begun enriching uranium to a higher level over the vociferous objections of the US and its allies who fear the process could eventually be used to give the Islamic republic nuclear weapons.

Even before the announcement US Defence Secretary Robert Gates said he believed the UN should slap new sanctions on Iran in "weeks, not months," according to his spokesman.

France and the US said on Monday Iran's action left no choice but to push harder for a fourth set of UN Security Council sanctions to punish Iran's nuclear defiance. Russia, which has close ties to Iran and has opposed new sanctions, appeared to edge closer to Washington's position, saying the new enrichment plans show the suspicions about Iran's intentions are well-founded.

Iranian state television said that the process began in the presence of inspectors from the UN nuclear watchdog agency. Uranium has to be enriched to fuel nuclear power plants and Iran needs the 20% enriched fuel for a research reactor producing medical isotopes.

Enriching uranium to 90%, however, creates the material for nuclear weapons, which many countries are afraid Iran is seeking. Iran denies the charge.

In effort to defuse the crisis, the International Atomic Energy Agency brokered a deal last year in which Iran would ship out its low enriched uranium to be processed abroad and returned a year later. Iran initially rejected the deal, then later said that if an acceptable alternative could be reached, it would not continue the high level enriching process.

Ali Akbar Salehi, a vice president as well as the head of the country's nuclear programme, said the further enrichment would be unnecessary if the West found a way to provide Iran with the needed fuel. "Whenever they provide the fuel, we will halt production of 20%," he told state TV late Monday.

Iran has so far enriched uranium to a level of 3.5%, which is suitable for use in fueling nuclear power plants.

On Tuesday, the spokesman of Iran's Foreign Ministry, Ramin Mehmanparast said any plan by the West to impose new Security Council resolutions would not be helpful. "If they attempt another resolution, they are making a mistake. It is not helpful in resolving the nuclear dispute between Iran and the West," he said. "They are completely wrong if they think our people will back down even a single step."

Iran says it needs the 20% enriched fuel for a research reactor producing radio isotopes to treat cancer and manufacture radiography materials, adding that more than 850,000 people need the products for their illnesses.