The United States does not see the fueling of Iran's first nuclear power plant in Bushehr as a “proliferation risk," State Department spokesman Darby Holladay said Saturday.

“We recognize that the Bushehr reactor is designed to provide civilian nuclear power and do not view it as a proliferation risk,” Holladay said, adding that “It will be under IAEA safeguards and Russia is providing the fuel and talking back the spit nuclear fuel, which would be the principal source of proliferation concerns."

Iran began fueling its first nuclear power plant on Saturday, a potent symbol of its growing regional sway and rejection of international sanctions designed to prevent it building a nuclear bomb.

"Russia’s support for Bushehr underscores that Iran does not need an indigenous enrichment capability as its intentions are purely peaceful," Holladay said. "Russia’s supply of fuel to Iran is the model we and our P5+1 partner have offered to Iran. It is important to remember that the IAEA access to Bushehr is separate from and should not be confused with Iran’s broader obligations to the IAEA. On this score as the IAEA has consistently reported Iran remains in serious violation of its obligations.‬"

Iranian television showed live pictures of Iran's nuclear chief Ali Akbar Salehi and his Russian counterpart watching a fuel rod assembly being prepared for insertion into the reactor near the Gulf city of Bushehr.

"Despite all the pressures, sanctions and hardships imposed by Western nations, we are now witnessing the start-up of the largest symbol of Iran's peaceful nuclear activities," Salehi told a news conference afterwards.

Iranian officials said it would take two to three months before the plant starts producing electricity and would generate 1,000 megawatts, a small proportion of the nation's 41,000 megawatt electricity demand recorded last month.

Russia designed, built and will supply fuel for Bushehr, taking back spent rods which could be used to make weapons-grade plutonium in order to ease nuclear proliferation concerns.

Saturday's ceremony comes after decades of delays building the plant, work on which was initially started by German company Siemens in the 1970s, before Iran's Islamic Revolution.

The United States criticized Moscow earlier this year for pushing ahead with Bushehr given persistent Iranian defiance over its nuclear program.

Moscow supported the latest UN Security Council resolution in June which imposed a fourth round of sanctions and called for Iran to stop uranium enrichment which, some countries fear, could lead it to obtain nuclear weapons.

"The construction of the nuclear plant at Bushehr is a clear example showing that any country, if it abides by existing international legislation and provides effective, open interaction with the IAEA (International Atomic Energy Agency), should have the opportunity to access peaceful use of the atom," Sergei Kiriyenko, head of Russian state nuclear corporation Rosatom, told the news conference.

The fuelling of Bushehr is a milestone in Iran's path to harness technology which it says will reduce consumption of its abundant fossil fuels, allowing it to export more oil and gas and to prepare for the day when the minerals riches dry up.

Following the ceremony, Iran's Foreign Minister Manouchehr Mottaki told the country's semi-official Fars news agency that his country would continue to enrich its own uranium.

Iran's neighbours, some of whom are also seeking nuclear power, are wary of Tehran's nuclear ambitions and its growing influence in the region, notably in Iraq where fellow Shi'ites now dominate and Lebanon, where it is a backer of Hezbollah.

While most nuclear analysts say Bushehr does not add to any proliferation risk, many countries remain deeply concerned about Iran's uranium enrichment.