- Associated Press - Monday, August 9, 2010

VIENNA (AP) - Iran has activated equipment to enrich uranium more efficiently in a move that defies the U.N. Security Council, the International Atomic Energy Agency said Monday.

The Vienna-based nuclear watchdog said Iran has started using a second set of 164 centrifuges linked in a cascade, or string of machines, to enrich uranium to up to 20 percent at its Natanz pilot fuel enrichment plant. Another cascade there has been producing uranium enriched to near 20 percent since February.

If enriched to around 95 percent, uranium can be used in building a nuclear bomb. At 20 percent, it can be turned into weapons-grade material much more quickly than less-enriched uranium.

Tehran denies it has such aims and says its nuclear activities are for peaceful purposes only. But some in the international community _ the United States and its allies _ aren’t convinced.

IAEA spokeswoman Gill Tudor said that when agency inspectors visited the facility on July 17, “Iran was feeding nuclear material to the two interconnected 164-machine centrifuge cascades.”

This, she added, was “contrary to U.N. Security Council resolutions affirming that Iran should suspend all enrichment related activities.”

The U.N. Security Council imposed a fourth round of sanctions on Iran in June because of its refusal to halt uranium enrichment. Tougher unilateral U.S. and European Union sanctions followed in July.

Iran had informed the IAEA in March of its intentions to link the two cascades, Tudor said.

The move upgrades the efficiency of production by recycling the waste now being left by the first cascade to squeeze out more enriched uranium at near 20-percent levels, diplomats said in May when they disclosed to The Associated Press that Iranian technicians had assembled the second 164-centrifuge cascade and appeared ready to activate it.

One of the diplomats familiar with Iran’s enrichment programs emphasized at the time that the idea appeared not to produce greater amounts than the first operating cascade was turning out, but to improve productivity.

The IAEA’s comments Monday came as Iran announced plans to get rid of its dollar and euro reserves in response to the latest U.N. sanctions over its contested nuclear program.

“To fight sanctions, we will remove the dollar and euro from our foreign exchange basket and will replace them with (the Iranian) rial and the currency of any country cooperating with us,” Vice President Mohammad Reza Rahimi told Iran’s semiofficial Fars news agency. “We consider these currencies (dollar and euro) dirty and won’t sell oil in dollar and euro,” he added.

Earlier Monday, a German lawmaker who recently visited Tehran said Iranian officials fear the country’s international trade will suffer from the latest round of sanctions.

A top Iranian adviser, meanwhile, said the Americans “must be dreaming” if they think they can intimidate Tehran into giving that program up.

Rainer Stinner, a foreign policy specialist with Germany’s Free Democrats _ junior partners in the coalition government of Chancellor Angela Merkel _ told The Associated Press Iranian lawmakers and government representatives he met last week in Teheran fear the sanctions will lead to decreased imports and exports.

Iranians “suppose that these sanctions could have a significant impact on import and export,” he told the AP in a telephone interview from New Delhi.

The new U.N. resolution seeks to crack down on the problem of evading sanctions and established a group of experts to gather information and analyze countries’ efforts to implement them.

Meanwhile, an adviser to Iran’s supreme leader, Ali Akbar Velayati, rejected the idea of Tehran giving up its nuclear program, insisting American threats will not deter Iran. He spoke during a trip to Syria.

The chairman of the U.S. Joint Chiefs of Staff said last week the U.S. military has a plan to attack Iran, although he thinks a military strike is probably a bad idea. Still, Adm. Mike Mullen said the risk of Iran developing a nuclear weapon is unacceptable.

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Associated Press writers Juergen Baetz in Berlin, Albert Aji in Damascus, Syria, and Ali Akbar Dareini in Tehran contributed to this report.