Iranian President Mahmoud Ahmadinejad declared Monday that Iran's nuclear program had grown 10 times stronger in the last year and said Western powers were wrong if they thought Iran would retreat under political pressure from its nuclear plans.

Ahmadeinejad's comments came as diplomats in Vienna said Iran is expanding its uranium enrichment program even as the U.N. Security Council focuses on possible sanctions for Tehran's defiance of its demand that it give up the activity and ease fears it seeks nuclear weapons, diplomats said Monday.

"Today the Iranian nation's (nuclear) strength is ten times stronger than it was last year at the beginning of this glorious path," Ahmadinejad said in a televised speech to a crowd in the southern city of Rey. "On the other hand, our enemy's strength has become ten times less than it was last year.

"They (the West) should know that taking advantage of nuclear energy is the demand of all the Iranian nation," he said, adding that "the Iranian nation insists on this right and will not retreat one iota."

The diplomats, who spoke on condition of anonymity because they were not authorized to divulge the information to media, told The Associated Press that within the past few weeks Iranian nuclear experts had started up a second pilot enrichment facility.

While the 164 centrifuges were not producing enriched uranium, even the decision to "dry test" them showed Iran's defiance of the Security Council.

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The Iranians disregarded an Aug. 31 deadline imposed by the Security Council to stop enrichment. They also turned down a package of incentives offered by the United States and its partners on condition that Iran ceases enrichment.

A draft resolution was expected to be circulated at the Security Council in the coming days that would impose limited sanctions. It remains unclear whether Russia and China — both veto-wielding permanent council members — would go along with punitive measures.

In Moscow, Russian Foreign Minister Sergey Lavrov said Monday he was hopeful that talks with the Iranians would resume and that there was a "real chance" for a negotiated settlement without sanctions.

However, the EU external relations commissioner, Benita Ferrero-Waldner, said Tehran had not responded positively to the incentives package and that the Security Council may need to explore "another alternative."

In Israel, Prime Minister Ehud Olmert said Iran must be prevented from attaining nuclear weapons, and its threats to destroy Israel must not be taken lightly.

"We have to prepare for the struggle to prevent this capability being attained," Olmert said during a business conference Monday, referring to the possibility of an Iranian nuclear weapon. "This struggle is not just Israel's."

During his speech, Ahmadinejad again called for the destruction of Israel and referred to Israeli officials as "a bunch of terrorists, a bunch of murderers."

The Associated Press contributed to this report.