Iran Joined Nuclear Group

(CNN) -- Iranian President Mahmoud Ahmadinejad confirmed Tuesday that his country has successfully produced low-grade enriched uranium at a level sufficient to power nuclear plants.

"I officially announce that Iran has joined countries with nuclear technology," Ahmadinejad said.

He stressed that Iran's nuclear efforts were for peaceful efforts and that no country should stand in its way.

"Our nation is a peaceful nation," Ahmadinejad said. (Watch as Ahmadinejad makes his announcement -- 1:59)

The enrichment took place Sunday, the president said, adding that "our nuclear activities have been under complete supervision, unprecedented supervisions" by the International Atomic Energy Agency.

"And today we are interested in operating under IAEA supervision," he said.

IAEA inspectors are at a facility in Natanz, but it is unclear whether they witnessed the enrichment process. (Uranium enrichment explainer)

Earlier Tuesday, Gholamreza Aghazadeh, head of Iran's atomic energy agency, said that the Natanz facility had enriched uranium at 3.5 percent -- a low-grade level sufficient to run a power plant, but far below the 90 percent required for weapons.

The U.N. Security Council has demanded that Iran cease its enrichment activities, but Tehran says that the country has a right to produce nuclear fuel for peaceful purposes.

The West, led by the United States, believes that Iran plans to build nuclear weapons. (Watch what Iran's annoucement could mean in the future -- 2:06)

"This is another step by the Iranian regime in defiance of the international community," U.S. State Department spokesman Sean McCormack told reporters in Washington.

"Once again they have chosen the pathway of defiance as opposed to the pathway of cooperation. And we would call upon the Iranian regime to reconsider the steps that it has taken," McCormack said.

Earlier, former President Hashemi Rafsanjani told the Kuwait News Agency that Iran's enrichment facility had successfully enriched uranium using a cascade of 164 centrifuges. Last month, Iran said it was producing enriched uranium from a cascade of 20 centrifuges.

Thousands of the devices must operate in a series of cascades to yield enough highly enriched uranium needed for a nuclear bomb.

After Rafsanjani's announcement, White House spokesman Scott McClellan told reporters that Iran should be taking steps to renew confidence in its nuclear intentions, instead of moving in the "wrong direction."

Iran's new statements would only result in further isolation, and the United States will have to consult with its allies on what the next step in the diplomatic standoff would be, McClellan said. (Watch how Iran poses much different diplomatic obstacles than Iraq -- 2:00)

Talks between Iran and Britain, France and Germany stalled in January when Iran began small-scale uranium enrichment and ended its voluntary cooperation with the IAEA, which had been conducting surprise inspections.

IAEA Director-General Mohammed ElBaradei plans to visit Iran this week.

McCormack said Secretary of State Condoleezza Rice spoke with ElBaradei on Monday, and ElBaradei told her he was going to Iran to convey the message that Tehran needs to abide by the IAEA demands.

Rafsanjani said ElBaradei would face "new circumstances" when he arrives but did not elaborate.

Rafsanjani said that the attention given by the West had made Iran's nuclear program "extremely complicated," adding that "Iran is very serious about defending its legal rights."

Bush administration officials say they are pursuing a diplomatic solution with Iran.

They have been fending off questions over a report in this week's issue of The New Yorker that preparations for military strikes on Iran -- possibly including nuclear weapons -- have gone "beyond contingency planning."

Defense Secretary Donald Rumsfeld dismissed that report, written by journalist Seymour Hersh, as a trip to "fantasy land."

"Let me be clear: The department's policy is the president's policy," Rumsfeld said. "President Bush and America's allies are on a diplomatic track."