President Mahmoud Ahmadinejad boasted Iran was now a nuclear nation on Thursday as he marked the 1979 Islamic revolution, prompting the West to warn his regime would soon be slapped with new sanctions.

"One day they said we cannot enrich uranium, but with the resistance of our leader, nation ... and with the help of God, the Iranian nation has become nuclear," Ahmadinejad said.

"They (Americans) want to dominate our region but the Iranian people will never let them do that," he said in a speech at Tehran's Azadi (Freedom) Square before a crowd of hundreds of thousands.

"The head of the atomic energy organisation (Ali Akbar Salehi) said the first stock of 20 percent fuel was produced and delivered to scientists," he added.

Iran had previously enriched uranium to just 3.5 percent but has started enriching it to the higher level required for a Tehran medical research reactor after snubbing a UN-drafted plan for the nuclear fuel to be supplied by France and Russia.

The White House cast doubt on the Iranian claims, saying some of Tehran's statements were based on politics, and not science.

"We do not believe they have the capacity to enrich to the degree to which they say they are now enriching," said White House spokesman Robert Gibbs.

But Salehi said Tehran could be able to make the nuclear fuel plates required to power a research reactor in four to five months.

The European Union was ready to announce sanctions against Iran within "days or weeks" if the UN Security Council fails to do so, according to Finnish Foreign Minister Cai-G�ran Alexander Stubb.

On Wednesday, the US Treasury Department already imposed an asset freeze on an Iranian Revolutionary Guard Corps commander and four subsidiaries of a construction firm owned or controlled by the elite force.

A restricted document of the International Atomic Energy Agency (IAEA) revealed Iran had informed the UN watchdog on Monday that it would start enriching uranium to 20 percent from Tuesday.

The one-page document said Iran had said it intended to enrich a small amount -- about 10 kilogrammes (22 pounds) -- to the higher level and had asked for the agency's inspectors to be present at the enrichment plant at Natanz.

IAEA chief Yukiya Amano noted Iran currently had just one cascade of centrifuges at the Natanz plant capable of the additional enrichment.

Earlier this week, Iran's atomic chief Salehi said the separate cascade was "more on a lab scale," suggesting its output would be limited.

Ahmadinejad mocked Western governments' focus on removing the majority of Iran's existing stockpiles of low-enriched uranium (LEU) from the country.

He bragged that the Natanz plant, where Iran has been enriching uranium in defiance of UN Security Council ultimatums and sanctions, had the capacity to produce large quantities to replace any Iran shipped out.

"They think it is such a big job to take some hundred kilos of 3.5 pct uranium out of Iran," he said, referring to the UN-drafted deal, which proposed supplying the fuel for the Tehran research reactor in return for Iran shipping out most of its stockpiles of LEU.

"We are making several kilos of this in Natanz every day. In the near future, inshallah, our daily production will be tripled."

Experts say once Iran has enriched uranium to the 20 percent level, there is nothing to stop it carrying on to the 93 percent level needed to produce nuclear weapons as the technology is the same.

The West suspects Iran of using its nuclear programme as a cover for efforts to build the atomic bomb, a charge Iran strongly denies.

Western governments have stepped up the pressure on Iran since it announced on Tuesday it had begun work to enrich uranium to 20 percent, which it says is for a medical research reactor in Tehran.

British Prime Minister Gordon Brown warned international patience with Iran was running out.

"I believe that the mood around the world is now increasingly one where, patience not being inexhaustible, people are turning to look at the specific sanctions that we can place on Iran," Brown said.

Italian Foreign Minister Franco Frattini urged international unity over sanctions against Iran.

"Iran wants to divide us, and the European Union, the United States, Russia and China need to remain united," Frattini said.

"We want Iranian uranium to be enriched outside of Iran: that would lead towards a resolution of Iran's problems with the international community."