Dubai: Diplomats yesterday confirmed a report that Iran has begun uranium enrichment at an underground bunker and said the news is particularly worrying because the site is being used to make material that can be upgraded more quickly for use in a nuclear weapon than the nation's main enriched stockpile.

The diplomats said that centrifuges at the Fordo site near Iran's holy city of Qom are churning out uranium enriched to 20 per cent. That level is higher than the 3.5 per cent being made at Iran's main enrichment plant and can be turned into fissile warhead material faster and with less work.

Two diplomats spoke to AP on condition of anonymity because their information was confidential and based on an inspection of Fordo last week by the International Atomic Energy Agency.

They said 348 machines were operating at Fordo in two cascades — the linked up configuration needed to enrich.

Meanwhile, Supreme leader Ayatollah Ali Khamenei said Iran will not falter in the face of western-imposed sanctions. "The firm decision of the Islamic Republic is to resist the pressures" of Western powers, Khamenei said.

"While the Iranian people have travelled the road to success and see the signs of new victories to come, the [western] oppressor is trying to frighten the Iranian people and officials by brandishing the threat of sanctions."

Adding to Iran-US tensions, Iran's state radio reported yesterday that a Tehran court has convicted an American man of working for the CIA and sentenced him to death.

Iran charges that a former US Marine, Amir Mirzai Hekmati received special training and served at US military bases in Iraq and Afghanistan before heading to Iran for his alleged intelligence mission.

Under Iranian law, Hekmati, a dual US-Iranian national has 20 days to appeal. His father, a professor at a community college in Flint, Michigan, has said his son is not a CIA spy and was visiting his grandmothers in Iran when he was arrested.