Iran officially confirmed it has stepped up uranium enrichment by injecting gas into a second network of centrifuges, a state-run newspaper reported Saturday.

The gas injection marked Iran's first known uranium enrichment since February. The process can either yield nuclear fuel or material for a warhead, but doesn't represent a major technological breakthrough and is unlikely to bring Iran within grasp of a weapon.

However, Tehran's announcement signaled the Islamic Republic's resolve to expand its atomic program at a time of divisions within the U.N. Security Council over a punishment for Iran's defiance.

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"We have exploited products from both cascades," the Iran Daily newspaper quoted Mohammad Ghannad, deputy head of Iran's Atomic Energy Organization, as saying Saturday. "The second one was installed in the past two week."

Ghannad said both cascades were enriching uranium by 3 to 5 percent, enough for industrial use but not for weapons. "This experience will help Iranian engineers get closer to industrial uranium enrichment," he said.

The U.N.'s nuclear watchdog, the International Atomic Energy Agency, has been aware of the second cascade for the past five months, Ghannad said. "IAEA inspectors visited the cascades in Natanz last week," he said.

U.S. President George W. Bush called the report Friday that Iran had doubled its enrichment capacity "speculation," but said a nuclear-armed Iran was unacceptable.

Washington has long pushed for sanctions against Iran for its failure to stop enriching uranium — a process Tehran says aims only to generate electricity and others suspect is a cover for building nuclear arms.

Russia and China, with strong commercial ties to Tehran, have shied away from punitive measures and left the door open to last-minute talks.

All three, plus France and Britain, have veto power on the Security Council, which is now weighing a draft resolution that would impose limited sanctions on Iran.

Iran touted its ability to enrich uranium last February, when it produced a small batch of low-enriched uranium using a first set of 164 centrifuges at its pilot complex in Natanz.

While no experiments to enrich more uranium had been announced since, Tehran insists it never halted the process despite Western demands, and defiantly bypassed an Aug. 31 deadline to do so.

"Iran more likely slowed down the development program over the summer as part of a diplomatic strategy to persuade the world that it would not be nearing nuclear weapons capability any time soon," said Mark Fitzpatrick of the International Institute for Strategic Studies in London.

"Now that the Security Council is taking up a sanctions resolution, Iran has started the second cascade as a political signal to show that it does not give in to pressure," he said.

In Washington, President Bush insisted the United States would not stand for a nuclear-armed Iran.

"Whether they've doubled it or not, the idea of Iran having a nuclear weapon is unacceptable," Bush told reporters. "It says to me that we must double our effort to work with the international community to persuade the Iranians that there is only isolation from the world if they continue working forward on such a program."

Doubling Iran's capacity would still mean it was nowhere close to churning out enough uranium to fuel a reactor. Tehran has said it plans to install 3,000 centrifuges at Natanz by year's end, but it would take 54,000 centrifuges to fuel a reactor.

Still, Israeli Prime Minister Ehud Olmert compared Iran to Nazi Germany and chastised world leaders for not doing enough to stop its nuclear program.

Russia's defense minister said Friday he didn't "share concerns" about the report, and suggested that Iran's new centrifuges were harmless.

"They are completely empty, so to talk about enriched uranium or uranium for military use, is at the very least, premature," Sergei Ivanov told reporters in Moscow.

France, one of the U.N. draft resolution's sponsors, called Iran's move a "negative signal" that should be taken into account at U.N. talks over possible sanctions.

Foreign Ministry spokesman Jean-Baptiste Mattei said the Iranian announcement was not a great surprise because the International Atomic Energy Agency had said in August that Iran was developing new nuclear capacities.

The enrichment process takes gas produced from raw uranium and aims to increase its proportion of the uranium-235 isotope, needed for nuclear fission.

The gas is pumped into a centrifuge, which spins, causing a small portion of the heavier, more prevalent uranium-238 isotope to drop away. The gas then proceeds to other centrifuges — thousands of them — where the process is repeated.