Iran said Sunday it discovered uranium reserves and was setting up production facilities for the peaceful use of nuclear energy.

President Mohammad Khatami said Iran was "determined to make use of advanced nuclear technology for peaceful purposes" after announcing that researchers discovered uranium reserves in central Iran near Yazd and established production facilities in nearby Isfahan and Kashan.

Khatami's comments were carried by the official Islamic Republic News Agency, which provided no further details.

Iran, which President Bush said was part of an "axis of evil" with Iraq and North Korea, has invited U.N. atomic inspectors to visit two Iranian nuclear plants in central Iran that Washington says are part of a secret weapons program.

The head of the International Atomic Energy Agency, Mohammed ElBaradei, and his inspection team are scheduled to arrive in Iran on Feb. 25 to visit nuclear facilities at Natanz and Arak.

"We assure the world that the Islamic Republic of Iran is making use of all domestic facilities to acquire peaceful nuclear technology and considers this its right to do so," Khatami said.

America has long been suspicious of Iran's nuclear program, accusing it of seeking to acquire nuclear weapons and of sponsoring terrorism. Iran rejects those charges.

In December, U.S. State Department spokesman Richard Boucher said satellite imagery indicated structures at the Natanz plant were being covered with earth, indicating Tehran is building "a secret underground site where it could produce fissile material."

U.S. officials say Iran's lack of fissile material -- either enriched uranium or plutonium -- remains a key stumbling block for its goals of either producing or acquiring nuclear weapons.