The suspension of all enrichment at the Fordow plant in the mountains near the Shiite holy city of Qom was one of the main curbs on its nuclear activities that Iran accepted in return for the lifting of international sanctions.

But Washington's abandonment of the deal in May last year followed by its reimposition of crippling sanctions prompted Iran to begin a phased suspension of its own commitments.

Under the terms of the agreement, Iran has retained more than 1,000 first-generation centrifuges at the Fordow plant, which have been running empty or remained idle since it took effect.

"Starting from tomorrow (Wednesday), we will begin injecting (uranium hexafluoride) gas at Fordow," Rouhani said in a speech broadcast by state television.

His announcement came a day after tensions flared anew on the 40th anniversary of the US embassy siege and hostage crisis, with thousands in Tehran taking to the streets and Washington imposing fresh sanctions.

The United States replied by vowing to keep up its "maximum pressure" campaign against Iran with a goal of ending all enrichment.

"Iran has no credible reason to expand its uranium enrichment program, at the Fordow facility or elsewhere, other than a clear attempt at nuclear extortion that will only deepen its political and economic isolation," State Department spokeswoman Morgan Ortagus said.

Iran said the resumption of enrichment at Fordow would be carried out transparently and witnessed by inspectors from the United Nations nuclear watchdog, the International Atomic Energy Agency.

But the European Union voiced disquiet at the new step away from the 2015 deal.

"We are concerned by President Rouhani's announcement today to further reduce Iran's commitments," EU spokeswoman Maja Kocijancic told reporters.

France urged Tehran to "go back on its decisions, which contradict the accord", while Britain's Foreign Secretary Dominic Raab said that "Iran's latest actions clearly contravene the deal and pose a risk to our national security."

"We want to find a way forward through constructive international dialogue, but Iran needs to stand by the commitments it made and urgently return to full compliance," Raab said.

Russia also expressed worry, despite its good relations with Iran.

"We are monitoring the development of the situation with concern," President Vladimir Putin's spokesman Dmitry Peskov told reporters.

"We support the preservation of this deal."

At the same time, Peskov said Moscow understood Tehran's concerns over the "unprecedented and illegal sanctions" imposed by Washington.

The move is the fourth announced by Iran since it began responding to Washington's abandonment of the agreement.

- 'Committed to negotiations' -

Iran has repeatedly warned the remaining parties to the deal -- Britain, China, France, Germany and Russia -- that the agreement can only be rescued if they help it circumvent US sanctions.

European governments have struggled to come up with a mechanism that would allow foreign firms to continue to do business with Iran without incurring US penalties.

To Iran's mounting frustration, their efforts have so far failed to have any significant impact.

Rouhani stressed that Iran remained committed to efforts to save the 2015 agreement, despite its phased suspension of some of its commitments.

"The fourth phase, like the three previous ones, is reversible," he said.

"We are committed to all the behind-the-scenes negotiations we have with some countries for a solution.

"Over the next two months, we will negotiate more."

Rouhani said Iran wanted to return to a situation in which "we can easily sell our oil, we can easily use our money in banks."

If that were achieved, "we will completely go back to the previous situation."

On the streets of Tehran, trader Mohammad, who declined to give his second name, said sanctions had caused enough damage to the Iranian economy and he hoped the country would "abide by it (the nuclear deal) completely, as in the past".

The EU warned on Monday that its continued support for the deal depended "on full compliance by Iran".

But Ellie Geranmayeh, an Iran expert at the European Council on Foreign Relations, said the measures were designed to increase Iran's leverage in future talks and to coax Western countries to provide Iran with economic relief.

"This is not attempt to inch towards nuclear weapon," she wrote on Twitter. "#IAEA continues to provide intrusive monitoring."

Iran has taken a series of actions to build pressure over the 2015 deal. On Monday, it announced a more than tenfold increase in its enriched uranium production as a result of the steps away from the accord.