'Urgent talks'

The announcement of the new facility came just days before an October 1 meeting in Geneva between Iran and six world powers to discuss Tehran's disputed atomic programme.

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The US, Russia, China, Britain, France and Germany are sending diplomats to meet their Iranian counterpart in Geneva in order to test how serious Iran is about coming clean on its uranium enrichment programme.

Clinton said the disclosure of a second uranium enrichment plant near the city of Qom adds urgency to the talks next week.

Obama and other Western leaders have threatened Tehran with new sanctions if it does not "come clean" during the Geneva talks.

"They are going to have to make a choice," Obama said at a G20 summit in Pittsburgh, US, on Friday.

"Are they going to go down the path of giving up the acquisition of nuclear weapons and abide by international standards in their pursuit of peaceful nuclear energy, or continue going down a path that will lead to confrontation?" he said.

Uranium enrichment lies at the heart of the nuclear controversy, as the process can be used to make an atomic bomb as well as producing fuel for nuclear reactors.