President Mahmoud Ahmadinejad on Sunday ordered Iran's atomic chief to begin higher uranium enrichment, raising the stakes in a dispute with the West days after seeming to accept a UN-drafted nuclear deal.

Ahmadinejad's declaration drew immediate fire from Britain, which said it was "clearly a matter of serious concern," while US Defence Secretary Robert Gates called for mounting "international pressure" on the Islamic republic.

In a speech at an exhibition on laser technology broadcast live on state television, Ahmadinejad blamed world powers for the stalemate over the nuclear fuel deal, but left the door open for possible negotiation over the proposal.

"I had said let us give them (world powers) two to three months and if they don't agree, we would start ourselves," he said.

"Now Dr (Ali Akbar) Salehi, start to make the 20 percent with the centrifuges," the hardliner told Iran's atomic chief, who was in the audience, referring to high-enriched uranium required as fuel to power a Tehran reactor.

Britain said that if Iran ploughed ahead with higher uranium enrichment, it would be in breach of five United Nations Security Council resolutions.

"Reports that Iran is planning to enrich some of their fuel to 20 percent level of enrichment are clearly a matter of serious concern," a spokeswoman for the foreign ministry said in a statement issued in London.

Gates, meanwhile, called on the international community to stand united against Iran.

"The international community has offered the Iranian government multiple opportunities to provide reassurance of its intentions. The results have been very disappointing," Gates said after meeting his Italian counterpart Ignazio La Russa in Rome.

"If the international community will stand together and bring pressure on the Iranian government, I believe there is still time for sanctions and pressure to work. But we must all work together."

Analysts called Ahmadinejad's comments an attempt to pressure Washington and drive a wedge between the six world powers, some of whom are still hesitant to back fresh sanctions against Tehran.

"Ahmadinejad wants to put pressure on the West, especially the US. He was responding to those in the West who do not want Iran to strike a deal," Iranian analyst Mohammad Saleh Sadeghian told AFP.

"I think that Iran prefers a swap deal over the option of producing the fuel" of 20 percent enriched uranium itself, he added.

A Western analyst who asked not to be named said Iranian declarations such as Ahmadinejad's on Sunday were attempts to "delay potential sanctions by dividing the six world powers without backing down on the nuclear programme."

World powers fear that Tehran wants to enrich uranium to very high levels for use in an atomic weapons programme, and hence want to remove its low-enriched uranium (LEU) through the UN-drafted deal.

Iran insists its nuclear enrichment drive is purely peaceful.

Tehran and world powers are locked in a stalemate over the UN-drafted deal, which envisages the Iran's 3.5 percent LEU being sent to Russia and France for enrichment to 20 percent and then returned as fuel for the Tehran reactor.

Ahmadinejad insisted that world powers "unconditionally" accept exchanging Iran's LEU for high purity 20 percent enriched uranium to be used as nuclear fuel for the Tehran reactor, which makes medical isotopes.

His statement comes after he indicated in an interview on state television last Tuesday that Iran was ready to send its LEU abroad for conversion into 20 percent nuclear fuel.

Iranian officials have opposed the UN-brokered proposal, saying they would prefer a simultaneous exchange on Iranian soil, a plan rejected by world powers.

Ahmadinejad said on Sunday that if the world powers "come forward and say 'we will exchange (uranium) unconditionally and cooperate on your reactors and medicine'... fine then we will cooperate" too.

Salehi also emphasised that world powers have little time left on a fuel deal with Iran.

"If they do not enter this fuel exchange we have to be ready for 20 percent enrichment," Fars news agency quoted him as saying.

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