WASHINGTON - The United States accused Tehran of defying the world
community on Wednesday and said it risked further isolation after the international atomic watchdog said Iran had begun making nuclear fuel in its underground uranium enrichment plant.

The International Atomic Energy Agency cited the nuclear activity in a note that became public on Wednesday.

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"The IAEA's letter demonstrates the Iranian government's continued defiance of the international community. Iran's leaders continue to lead their proud people down a path of further isolation," said White House National Security Council spokesman Gordon Johndroe.

"While their leaders see this as an advance, it is only a step backward," he added. "Instead of complying with the United Nations Security Council resolutions, Iran's actions may only lead them to more sanctions."

Iran has begun making nuclear fuel in its underground uranium enrichment plant, according to a confidential International Atomic Energy Agency document obtained by news agencies on Wednesday.

The paper, obtained by Reuters, also said Tehran had started up more than 1,300 centrifuge machines, divided into eight cascades, or networks, in the Natanz complex, in a drive to lay a basis for "industrial scale" enrichment.

Both moves intensified Iran's defiance of United Nations Security Council resolutions demanding that it stop enriching uranium over fears Tehran's professed civilian nuclear fuel program is a cover for mastering the means to build atomic bombs.

The document - a letter to Iranian officials from a senior IAEA staff member - also protests an Iranian decision to prevent agency inspectors to visit the country's heavy water facility that, when built, will produce plutonium. Enriched uranium and plutonium can both be used for the fissile core of nuclear warheads.

The letter, signed by IAEA Deputy Director General Olli Heinonen and dated April 18 - Thursday - said the agency "wanted to take note of the information provided by Iran ... that Iran has put into operation 1,312 centrifuges" - the machines used to spin the gas into enriched uranium.

The letter also cited Iranian information to the agency that some UF6 is being fed into the centrifuges, referring to the uranium gas that can be enriched to levels potent enough to be used for nuclear arms.

Iran says it wants to enrich only to lower levels suitable to generate nuclear power. But suspicions about its ultimate intentions, after nearly two decades of nuclear secrecy exposed only four years ago, have led to UN Security Council sanctions for its refusal to freeze its enrichment program.

It was unclear what the purpose of the uranium gas feed was. A diplomat accredited to the IAEA, who demanded anonymity because he was disclosing confidential information, said the operation appeared to be part of stress tests meant see if the machines were running smoothly.

But he and another diplomat said that, even if the operation was not meant to enrich large amounts of uranium, it appeared to be the last step before larger-scale enrichment begins.

Last week, Iran said it had begun operating 3,000 centrifuges at its Natanz facility - nearly 10 times the previously known number. The U.S., Britain, France and others criticized the announcement, but experts - and several world powers - expressed skepticism that Iran's claims were true.

Still the letter reflected a swift advance in the program. A little more than two weeks ago, diplomats familiar with Iran's nuclear dossier had said Tehran was running only a little more than 600 centrifuges, and had not introduced any uranium gas into them.

Its heavy water enrichment facilities at Arak also are under suspicion, because the plant produces plutonium, which can also be used in an arms program. Iran argues it needs the plant for medical research, despite a Security Council demand that it also freeze construction at Arak.

When it is completed within the next decade, Arak will produce enough plutonium for two bombs a year.

Iran last month announced it was unilaterally abrogating part of its Safeguards Agreements linked with the IAEA under which Tehran is obligated to report to the agency six months before it introduces nuclear material of any kind into any facility. In his letter, Heinonen suggested that Iran invoked this move in denying his inspectors the right to visit the Arak facility, but argued it was illegal, because such agreements cannot be modified unilaterally.

Beyond that, Heinonen said, IAEA inspectors should be allowed to visit Arak because the section abrogated by Iran had to do with early provision of design information of new nuclear facilities and not to the frequency or timing of agency inspections to verify information on design already provided by Iran.