"Iran has succeeded in development to attain production at an industrial level," Mahmoud Ahmadinejad said in a speech at the Natanz uranium enrichment facility in central Iran.

The announcement came on the first anniversary of the start of uranium enrichment at the plant.

President Bush contends Iran is using its programme to develop nuclear weapons. Leaders of European nations have expressed similar alarm.

"We are very concerned," said White House spokesman Gordon Johndroe. "We call on the Iranian regime to comply with its obligations to the IAEA (International Atomic Energy Agency) and UN Security Council."

Iran's leader vowed it will be used for energy "and for the expansion of peace and stability," adding that the goal of "progress" for Iran is "irreversible."

Mr Ahmadinejad's speech came on what Iran called its National Nuclear Feast, designed to send a message to the world that the nation will not halt its nuclear activities despite calls for it to do so from many Western governments, particularly the United States, and sanctions imposed by the UN Security Council.

US State Department spokesman Sean McCormack called Monday's events "another signal Iran is in defiance of the international community."

CNN/VOVNews