Iran has said it has removed United Nations seals on its Isfahan nuclear plant, and the facility is fully operational.
The step towards uranium enrichment comes as the International Atomic Energy Agency holds a second day of talks over Iran's decision to resume its nuclear programme.
The US and the EU have objected to the reopening of the plant in Isfahan, fearing it could be used to develop nuclear weapons.
Iran says the programme is needed to boost electricity supplies.
The IAEA is considering whether to report Iran to the UN Security Council.
If it does decide to report Iran to the UNSC, it could lead to the possible imposition of sanctions.
The Iranian government earlier said it was ready for talks and would put forward new proposals.
The US President George W Bush said Iran's stated wish to continue talks with Europe is a good sign but he remained sceptical about Tehran's intentions.
