As world powers considered how to tackle Iran's nuclear program, the government allocated funds Monday to finish the country's first nuclear power plant and workers demonstrated in support of the program in front of the former U.S. Embassy.

To complete the nuclear reactor at Bushehr, southwest Iran, the government has assigned 1,940 billion rials (US$242.5 million, euro193.4 million), government spokesman Gholam-Hossein Elham told reporters Monday.

Iran expects Bushehr, which was built with Russian help, to come on stream later this year.

Iran is under heavy pressure to abandon its uranium enrichment, a process that can produce fuel for the Bushehr plant or warheads for nuclear weapons. On Friday, the International Atomic Energy Agency reported that Iran had failed to comply with a 30-day U.N. Security Council deadline to suspend enrichment.

CountryWatch: Iran

The report opened the way for the council to take punitive measures against Iran at a meeting expected this month. While the United States, Britain and France are inclined toward imposing sanctions, the other veto-holding members, Russia and China, are opposed to tough penalties.

Iran denies that its nuclear program has any military aims, saying it is confined to generating electricity.

Some 2,000 workers demonstrated in favor of the program outside the former U.S. Embassy in downtown Tehran.

"Nuclear energy is our obvious right!" the workers chanted. "With more work, sanctions will not affect us!"

The demonstration, which marked Labor Day, was organized by the House of Workers, a union for workers of various industries.

The United States broke relations with Iran in 1979 after militants stormed the U.S. Embassy and held its occupants hostage for more than a year.