"We are still continuing with the suspension of enrichment that we agreed to last year" with the European Union's so-called "big three" Britain, France and Germany, Iranian Foreign Minister Kamal Kharazi told reporters.

"During a meeting in Brussels in February, we decided to expand this suspension to making parts for centrifuges. But since the Europeans failed to meet their commitments, we can manufacture centrifuge parts," he said. "We have now started manufacturing centrifuge parts."

Centrifuges are used to enrich uranium. Iran says it only wants to produce fuel for an atomic energy programme, but highly enriched uranium can also be used for nuclear weapons.

Iran denies widespread suspicions it is secretly trying to acquire the bomb.

In October last year Iran signed a deal with the three Europeans to halt certain aspects of its work on the sensitive nuclear fuel cycle as part of building trust with the International Atomic Energy Agency (IAEA).

The October deal covered a suspension of enrichment pending the completion of IAEA inspections. Then in February Iran agreed to widen the scope of the suspension to related fuel cycle activities.

In return, the three Europeans pledged to help Iran resolve its problems with the IAEA if full cooperation was forthcoming. Judging that Iran had not adequately cooperated, they sponsored a tough resolution critical of the Islamic republic. Iran asserts that it has cooperated.

WAR.WIRE