Uranium enriched to low level is used to produce nuclear fuel but further enrichment can make it suitable for weapon use.

'Good progress'

Iran has said it plans to move towards large-scale uranium enrichment that will ultimately involve 54,000 centrifuges, with a target of 9,000 operational by next year.

Aghazadeh said Iran aims to start electricity production at its first nuclear power plant - the Russian-built Bushehr facility - in mid-2009.

He said "good progress" has been made in constructing a 40 megawatt heavy-water reactor near Arak in central Iran.

"The heavy water plant is experiencing a production beyond its capacity," Aghazadeh said without elaboration.

"The Arak complex will be used to make isotopes for medical and agricultural ends," he said.

The West has repeatedly called on Iran to stop construction of the reactor, fearing it could be used as a second track toward building an atomic warhead.

Rocket launch

Iran also announced on Wednesday that it had successfully launched into space its second rocket - the Kavoshgar (Explorer) 2.

"The rocket was launched to register and send correct environmental data and [to test] separation of the engine from the body," state radio said.

It said after reaching the lower reaches of space, the rocket returned to Earth on a parachute.

The first Kovoshgar rocket was launched in February.

The West fears Iran's space programme may form part of a bid to build missiles that could carry warheads.

Iran's refusal to halt its programmes has drawn three rounds of UN sanctions since 2006, as well as separate US measures.