President Mahmoud Ahmadinejad said Tuesday that Iran for the first time had succeeded on a small scale in enriching uranium, a key step in generating fuel for a reactor or fissile material for a bomb. The U.N. Security Council has demanded that Iran stop all enrichment activity because of suspicions the program's aim is to make weapons.

Iran's small-scale enrichment used 164 centrifuges, which spin uranium gas to increase its proportion of the isotope needed for the nuclear fission at the heart of a nuclear reactor or a bomb.

Saeedi said Iran has informed the International Atomic Energy Agency that it plans to install 3,000 centrifuges at its facility in the central town of Natanz by late 2006, then expand to 54,000 centrifuges, though he did not say when.

"We will expand uranium enrichment to industrial scale at Natanz," Deputy Nuclear Chief Mohammad Saeedi told state-run television.

Saeedi said using 54,000 centrifuges will be able to produce enough enriched uranium to provide fuel for a 1,000-megawatt nuclear power plant like one Russia is finishing in southern Iran.

In theory, that many centrifuges could be used to develop the material needed for hundreds of nuclear warheads if Iran can perfect the techniques for producing the highly enriched uranium needed.

Iran, which has made no secret of its plans to ultimately expand enrichment to around 50,000 centrifuges to fuel reactors, is still thought to be years away from a full-scale program.

Still, concerns grew Tuesday when Ahmadinejad announced Iran's enrichment success in a nationally televised ceremony, saying the country's nuclear ambitions are peaceful and warning the West that trying to force Iran to abandon enrichment would "cause an everlasting hatred in the hearts of Iranians."

The IAEA is due to report to the Security Council on April 28 whether Iran has met its demand for a full halt to uranium enrichment. If Tehran has not complied, the council will consider the next step. The U.S. and Europe are pressing for sanctions, a step Russia and China have so far opposed.

Iran's announcement quickly drew condemnations.

Russia criticized the announcement Wednesday, with Foreign Ministry spokesman Mikhail Kamynin saying, "We believe that this step is wrong. "

Russian Foreign Minister Sergey Lavrov reiterated Moscow's firm opposition to any military action against Iran.

Denouncing Iran's successful enrichment of uranium as unacceptable to the international community, Secretary of State Conodoleezza Rice said the U.N. Security Council must consider "strong steps" to induce Tehran to change course.

Rice also telephoned IAEA head Mohamed ElBaradei to ask him to reinforce demands that Iran comply with its nonproliferation requirements when he holds talks in Tehran on Friday.

"This is not a question of Iran's right to civil nuclear power," she said. "This is a question of ... the world does not believe that Iran should have the capability and the technology that could lead to a nuclear weapon."

Rice did not call for an emergency meeting of the Council, saying it should consider action after receiving an IAEA report by April 28. She did not elaborate on what measures the United States would support, but economic and political sanctions are under consideration.

In Berlin, Chancellor Angela Merkel's government said Iran's announcement was cause for concern.

"It is another step in the wrong direction by Iran," German government spokesman Thomas Steg said.

French government spokesman Jean-Francois Cope urged Iran "to respect its obligations" and stop nuclear activities.

British Foreign Secretary Jack Straw said he was "seriously concerned" by Ahmadinejad's announcement.

Israel's military chief of staff, Lt. Gen. Dan Halutz, cautioned that it will take some time before Iran achieves nuclear capability. "I think things will change in this process and we shouldn't see this as a foregone conclusion," he told Army Radio.

The chief of military intelligence, Maj. Gen. Amos Yadlin, told the Yediot Ahronot newspaper that Iran could develop a nuclear weapon "within three years, by the end of the decade."

ElBaradei was heading to Iran on Wednesday for talks aimed at resolving the standoff. The timing of Ahmadinejad's announcement suggested Iran wanted to present ElBaradei with a fait accompli and argue that it cannot be expected to entirely give up a program showing progress.

Former Iranian President Hashemi Rafsanjani—a powerful figure in the country's clerical regime—warned in an interview with the Kuwaiti newspaper Al-Rai Al-Aam that pressuring Iran over enrichment "might not have good consequences for the area and the world."

Rafsanjani, who heads the body that arbitrates between the parliament and the clerical hierarchy, said planned talks between Iran and the United States on stabilizing Iraq could lead to discussions on the nuclear dispute.

"If the talks on Iraq go in the right direction, there might be a possibility for that issue," Rafsanjani told the Al-Hayat daily. "There have been many cases where big and wide-ranging decisions had small beginnings."

Iranian and U.S. officials have insisted the talks will deal only with Iraq. So far, no date for the talks has been set.

Rafsanjani and other Iranian officials, meanwhile, reiterated that the country's nuclear ambitions were peaceful.

"There is no worry as we will not threaten anyone," Rafsanjani said as he arrived in Damascus on Wednesday, according to Syria's official news agency.

Thousands of centrifuges arranged in a network called a "cascade" are needed to produce enriched uranium. Getting any number to work together is delicate and difficult.

Iran resumed research on enrichment at Natanz in February. Saeedi said scientists there slowly built up the number of centrifuges in the cascade. On Sunday, they succeeded in enriching an amount of uranium to contain 3.5 percent of the isotope uranium-235—the proportion needed for reactor fuel—using 164 centrifuges.

Enriching uranium to the much higher levels needed for a nuclear warhead is even more difficult, requiring tens of thousands of centrifuges or much longer periods of time.

Iran is believed to have enough black-market components in storage now to build the 1,500 operating centrifuges it would need to make the 45 pounds of highly enriched uranium needed for one crude weapon.

"The next stage is to install 3,000 centrifuges. We definitely won't have problems doing that. We just need to increase our production line," Saeedi said.

Iran is pressing for further negotiations with the IAEA or with Western countries, hinting that it could agree to keep its enrichment program on a small scale under IAEA inspection without giving it up entirely.

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Associated Press writers Henry Meyer in Moscow, George Jahn in Vienna, Austria and Diana Elias in Kuwait City, Kuwait contributed to this report.

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