The United States and European Union, concerned that Iran's civilian nuclear programme could serve as a cover to build an atomic bomb, reacted angrily on Tuesday after Iran announced the end of a two-year suspension of uranium enrichment.
The United States and Britain, however, said there were no plans to use military force against Tehran over the nuclear row.
Iran insists its nuclear programme is solely to meet its electricity needs.
"We view this as a serious escalation on the part of Iran on the nuclear issue," Sean McCormack, the US State Department spokesman, said. adding that Tehran's actions were "unacceptable".
Scott McClellan, the White House spokesman, said that if Iran breached its international obligations, "there's no other choice but to refer the matter" to the UN Security Council for possible sanctions.
He added that President George Bush had "made it pretty clear" that he has no plans to use military force against Iran, although "he never takes options off the table."
Bush says he has no plans for
military action against Iran
In a statement, the European Union said Iran's move was "continuously eroding international confidence in the peaceful nature of its nuclear programme and is of serious concern to the entire international community."
No military force
The EU lamented Iran's "serious and regrettable steps" to remove seals of the International Atomic Energy Agency, IAEA, the UN's nuclear watchdog, from the Natanz research facility.
Iran had agreed to suspend uranium enrichment pending negotiations with Britain, France and Germany, known as the EU-3, on economic and other incentives to renounce any nuclear weapons ambitions.
The EU has been trying to reopen talks suspended in August after Iran rejected an initial set of incentives to abandon uranium enrichment, which produces fuel for nuclear power reactors but could also be used to make atomic bombs.
Britain expressed "profound
concern" over Tehran's decision
Jack Straw, the British foreign secretary, expressed "profound concern" over Tuesday's development and left the door open to referring Tehran to the United Nations Security Council.
Straw said the EU-3 plan to meet on Thursday to discuss Iran's action and that possible referral to the Security Council would be at the "top of the agenda."
"We'll make a decision then ... but I think it's clear the direction in which we're thinking," he said.
But Straw ruled out using force against Iran.
"Military action is not on our agenda, and I don't believe it's on anyone else's agenda," he said, pre-empting speculation that Israel or the United States might attempt a military strike.
In France President Jacques Chirac said Iran - along with fellow nuclear suspect North Korea - "would be committing a serious mistake if they did not take the hand that we are holding out to them".
Meanwhile German Foreign Minister Frank-Walter Steinmeier warned that Tehran had "crossed a line where the Iranians knew that it would not remain without consequences."
Mohamed ElBaradei, the IAEA director, said Iran had told his agency that it wanted to restart centrifuges at Natanz to enrich uranium on a "small scale." ElBaradei confirmed the move and said that seals at two "related storage and testing locations" were due to be removed by Wednesday.
Russia, which has offered a compromise deal to enrich Iranian uranium on Russian soil, expressed concern and disappointment over Iran's action.
"We call on Iran to return actively to a condition of moratorium and to full cooperation with the IAEA"
Russian foreign ministry statement
"We call on Iran to return actively to a condition of moratorium and to full cooperation with the IAEA,"" Russia's foreign ministry said in a statement.
Iran has yet to take up Russia's offer.
Negotiations on Russia's offer are due to continue in February in Moscow, Sergei Lavrov, Russian foreign minister, said, adding that the idea had been "endorsed by all interested parties - Europe, the United States, China and other states."
Japan has also called on Iran to end its nuclear activities.
Japan has close commercial links
with Tehran despite US concerns
"Japan deems it a matter of deep regret," Yoshinori Katori, Japanese foreign ministry's press secretary said in a statement released late on Tuesday.
Japan, which is almost entirely dependent on imported energy to fuel its massive economy, has forged close commercial links with Iran despite concern by the United States, Tokyo's main ally.