Reporting from Beirut – The head of Iran’s Atomic Energy Organization said that his country began a plan Tuesday to produce higher-grade uranium at its fuel production plant near the central town of Natanz.

Iranians in white lab coats cried “God is great” at the facility as they transferred the uranium from one capsule to another, presumably to begin the process, state television showed.

But it was unclear from Iranian statements whether Iran had actually started producing the uranium, had begun testing the process or had begun moving material around the facility as preliminary steps.

Tehran has said it will turn some of its uranium enriched to 3.5% purity, which is suitable to produce electricity, into material of 20% purity, necessary to power an ailing Tehran medical reactor. The West fears that Iran’s goal is to eventually produce high-grade uranium for weapons.

Iran’s nuclear chief, Ali Akbar Salehi, told state-run media that inspectors from the United Nations’ International Atomic Energy Agency will observe the process of further refining the fuel.

Tehran loudly proclaimed its decision to further refine its uranium after negotiations with the West over its nuclear program appeared to stall, sparking talk of tighter sanctions on Iran.

“The enrichment of uranium up to 20% does not mean the doors are closed to interaction and negotiations for fuel exchange,” Salehi said, according to the official Islamic Republic News Agency, or IRNA. “In case our adversary parties in the negotiations show wisdom and stop killing time, the Islamic Republic will be ready to go ahead with interaction.”

Western officials accuse Iran of dragging its feet on a U.N.-backed plan to transfer the bulk of its low-enriched uranium to Russia and France for a year to be further refined and transformed into fuel plates for the Tehran medical reactor. Iran says its wants the exchange carried out simultaneously on its own soil.

Western diplomats have called Iran’s move to further enrich the uranium a provocative escalation of the current standoff. Yukiya Amano, chief of the IAEA, issued a statement late Monday noting “concern” with Iran’s decision “as it may affect, in particular, ongoing international efforts to ensure the availability of nuclear fuel for the Tehran research reactor.”

Iran says it is acting within its rights as a signatory to the Nuclear Nonproliferation Treaty. “Our 20% enrichment lies within the framework of our peaceful nuclear programs, and it does not violate any convention,” Foreign Ministry spokesman Ramin Mehmanparast told reporters Tuesday, according to IRNA.

Low-enriched uranium can power energy reactors, whereas uranium enriched at levels of 60% or higher can be used to make a nuclear weapon. The West and Israel allege that Iran’s civilian nuclear program masks a drive to obtain weapons capability, an accusation Iran vehemently denies.

The U.S. and Western European nations have spearheaded an effort to quickly apply fresh sanctions on Iran. On Tuesday, Russian lawmakers, commentators and ranking officials signaled they might agree.

“Iran’s decision . . . increases doubts in the sincerity of Iran’s intentions to ease, through joint efforts, the existing concerns of the international community with regard to the Iranian nuclear program,” said Russian Foreign Ministry spokesman A.A. Nesterenko, according to the department website.

But China, which like Moscow wields veto power at the U.N. Security Council and maintains robust economic ties with Iran, called for more diplomacy.

“China hopes all relevant parties will step up diplomatic efforts and make progress in dialogue and negotiations.” Foreign Ministry spokesman Ma Zhaoxu told a regular briefing on Tuesday, according to the official New China News Agency.

Recent inspections revealed that Iran has about 8,000 high-speed centrifuges installed at Natanz, with more than half producing low-enriched uranium. Saleh told the semiofficial Iranian Students News Agency that Iran would continue to produce low-enriched fuel at the same rate but now plans to devote one 164-centrifuge section to further refine some of its 4,000-pound supply of low-enriched uranium into fuel for the medical reactor.

The 164 centrifuges can produce up to 11 pounds of 20% enriched uranium a month, more than enough to fuel the reactor, which needs about 4 pounds a month to produce isotopes for cancer treatment and diagnosis, Salehi said.

A uranium conversion plant in Isfahan can convert the 20% enriched uranium into fuel plates for the reactor, which is due to run out of fuel this year, he said.

“In the past seven months, any time Iran mentioned it could meet its fuel needs, Western nuclear experts and politicians questioned Iran’s capability to produce fuel plates,” state television quoted Salehi as saying. “But we have mastered the sophisticated technology of producing fuel plates.”

daragahi@latimes.com