President Mahmoud Ahmadinejad on Monday warned that Iran would respond to additional U.N. sanctions with new nuclear advances, in yet another show of defiance to international demands that the country roll back its atomic program.

The U.N. Security Council has set a deadline of late May for Iran to halt its uranium enrichment program, warning it will gradually ratchet up its punishments. The council imposed limited sanctions in December and strengthened them slightly last month because of Iran's refusal to suspend enrichment.

The enrichment process can produce fuel for nuclear reactors or — if taken to a higher degree — the material for atomic bombs. Iran, however, denies accusations from the U.S. and some of its allies that the country is secretly developing nuclear weapons.

"After the first resolution, we undertook the nuclear fuel cycle; after the second one, we began the industrial phase of nuclear fuel; and if another resolution is issued, new capabilities of the Iranian nation will surface," the state broadcasting company's Web site quoted Ahmadinejad as saying in a speech in the southern city of Kazeroun.

The U.N.'s latest sanctions ban Iranian arms exports and freeze the assets of 28 individuals and companies involved in Iran's nuclear or ballistic missile programs.

Iran has rejected the sanctions and announced a partial suspension of cooperation with the U.N. nuclear watchdog, the International Atomic Energy Association.

• Monitor the nuclear showdown in FOXNews.com's Iran center.

The Iranian president did not specify how the country would ramp up its development in response to a third set of sanctions.

Last week, Iran said it had begun operating 3,000 centrifuges at its Natanz plant — nearly 10 times the previously known number. The U.S., Britain, France and others criticized the announcement, but experts expressed skepticism that Iran's claims were true.

During Monday's speech, Ahmadinejad reiterated that Iran would not back down from its right to pursue nuclear development and maintained the peaceful nature of the country's program.

"The Iranian nation will use all capacities of nuclear energy in agriculture, industry, medicine and generating electricity," he said.

Iran's defiance has heightened concerns in the region that the U.S. or Israel could respond with a military strike against the country's nuclear facilities.

The U.S. stoked these fears last month when it held a military exercise off Iran's coast that included two aircraft carrier groups, its largest show of force in the region since the 2003 invasion of Iraq.

U.S. Chief of Naval Operations Adm. Michael Mullen attempted to quell concerns Monday by saying the U.S. had no plan to attack Iran and the heightened naval presence was meant to reassure its regional allies.

"I'm aware of no plans that involve any kind of attack on Iran," Mullen told reporters in the Pakistani capital, Islamabad. "All efforts with respect to Iran, I believe, need to be handled through the diplomatic channels."

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