Iran's president Mahmoud Ahmadinejad has ordered his country's atomic agency to begin the production of higher enriched uranium.
He said in comments broadcast on state television today: "God willing, 20% enrichment will start" to meet Iran's needs.
He did not give a date for the start of the enrichment process.
Speaking at a meeting attended by the head of Iran's atomic energy agency, Ali Akbar Salehi, Ahmadinejad said: "Mr Salehi, begin production of 20%" enriched uranium."
Producing enriched uranium is the international community's core concern over Iran's nuclear programme since it can be used to make nuclear weapons.
Iran says its programme is for peaceful purposes.
Iran and the West have been discussing a UN plan under which Iran would export its low-enriched uranium for enrichment abroad. The plan, which comes from the International Atomic Agency, was first drawn up in early October in a meeting in Geneva between Iran and the six world powers. It was refined later that month in Vienna talks among Iran, the US, Russia and France.
The Vienna talks came up with a draft proposal that would take 70% of Iran's low-enriched uranium to reduce its stockpile of material that could be enriched to a higher level, and possibly be used to make nuclear weapons. That uranium would be returned about a year later as refined fuel rods, which can power reactors but cannot be readily turned into weapons-grade material.
In what was interpreted to be a possible shift of policy on a major issue, Ahmadinejad said last week he was ready to export his country's low-enriched uranium for higher enrichment abroad, saying Iran had "no problem" with the plan. Today's comments, however, appeared to justify the scepticism with which his Tuesday's comments were met by world leaders.
Ahmadinejad today made no mention of what he said last week.
He, however, said that Iran has acquired laser technology for enrichment of uranium, but added, "For now, we do not intend to use it." He did not say why.
Iran is currently enriching uranium up to 4.5% for its under-construction nuclear power plant, using centrifuge machines. Its first nuclear power plant, built with Russia's help, will be operational later this year.
Iran's ambivalence over the enrichment issue comes at a time when the US and its Western allies have been pushing for a fourth round of UN sanctions to be slapped on Iran over its disputed nuclear program. But with Russia, and especially China, sceptical of any new UN penalties, they have to tread carefully to maintain six power unity on how to deal with the Islamic Republic.
International concerns include Iran's refusal to heed UN Security Council demands that it freeze its enrichment program; fears that it may be hiding more nuclear facilities after its belated revelations that it was building a secret fortified enrichment plant, and its stonewalling of an IAEA probe of alleged programs geared to developing nuclear arms.