The United States on Monday called Iran's decision of enriching uranium to the 20 percent level at its Fordow facility as "nuclear extortion".
Addressing the news, the International Atomic Energy Agency stated that inspectors are monitoring the activities at the compound and that Director-General Rafael Mariano Grossi plans to submit a report to member states later in the day.
But after President Donald Trump unilaterally pulled the United States out of the deal, Iran said it no longer feels bound by the agreement.
Iranian state television quoted government spokesman Ali Rabiei as saying that President Hassan Rouhani had given the order to begin the production.
The seizure came days before South Korea's deputy foreign minister was due to visit Tehran according to Iran's foreign ministry, as Iran wants South Korea to release billions in its assets held as a result of USA sanctions.
In a statement, Netanyahu said Iran's enrichment decision could be explained only as a bid to "continue to carry out its intention to develop a military nuclear programme".
Experts say Iran now has enough low-enriched uranium stockpiled for at least two nuclear weapons, if it chose to pursue them.
Iran maintains that it has never sought nuclear weapons and never would.
European Union spokesman Peter Stano said Brussels would wait until a briefing from the director of the UN's IAEA nuclear watchdog later Monday before deciding what action to take.
The announcement of enrichment at Fordo came as fears rose that Tehran had seized the MT Hankuk Chemi.
Enriched uranium - The deal limits Iran's stockpile of enriched uranium to 202.8 kg, a fraction of the more than eight tonnes it possessed before the deal. Already, a November attack that Tehran blames on Israel killed an Iranian scientist who founded the country's military nuclear program two decades earlier.
This Dec. 11, 2020, satellite photo by Maxar Technologies shows construction at Iran's Fordo nuclear facility.
The enrichment will take place at Fordow, which is an underground uranium enrichment facility.
But the Guardian council, which arbitrates disputes between the parliament and the government, approved it last month.
Rabiei said that despite those misgivings, the Iranian government is constitutionally bound to implement a law passed by parliament.
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