There have been hopes that the 2015 Joint Comprehensive Plan of Action (JCPOA) over Tehran's nuclear ambitions could be revived through new talks under the administration of US President Joe Biden, after his predecessor Donald Trump walked out of the deal in 2018.

But now "in escalating its non-compliance, Iran is undermining the opportunity for renewed diplomacy to fully realise the objectives of the JCPOA," Britain, France and Germany said in a statement.

The UN nuclear watchdog said Wednesday Iran has started producing uranium metal, in a fresh breach of the limits laid out in the 2015 deal which aims to ensure Tehran cannot acquire a nuclear weapon.

"We reiterate that Iran has no credible civilian justification for these activities, which are a key step in the development of a nuclear weapon," the statement by the three countries said.

It said that under the nuclear deal, Iran committed not to engage in producing or acquiring uranium metal for 15 years.

"We strongly urge Iran to halt these activities without delay and not to take any new non-compliant steps on its nuclear programme," the statement said.

The nuclear deal aimed to provide a gradual lifting of international sanctions against Iran in exchange for safeguards Tehran would not seek a nuclear weapon.

But it has been essentially moribund since the US pulled out, with Tehran stepping up its nuclear work in violation of the accord as retaliation.

Analysts have said only a narrow window of opportunity exists this year to bring the United States back on board.

The Biden administration is impatient to move fast, while the prospect of a hardliner winning an Iranian presidential election later this year is also looming large.

However it will require the most delicate diplomacy to move forward, with the White House insisting Iran must move to full compliance before the US can return to the deal, but Tehran wanting no preconditions.