updated 12/2/2009 10:49:53 AM ET 2009-12-02T15:49:53

Iran said Wednesday it would produce whatever nuclear fuel it needed on its own, the latest indication it was rejecting a U.N.-backed deal aimed at reining in Tehran's nuclear program over fears it is geared to produce weapons.

President Mahmoud Ahmadinejad said Iran will enrich its uranium to an even higher level on its own, after expressing frustration over the ongoing negotiations over the U.N. deal to exchange its low-enriched uranium for more highly enriched fuel rods.

The speech before a crowd of thousands in the central city of Isfahan is Ahmadinejad's latest defiance of international concerns over his nuclear program and follows promises to increase Iran's uranium enriching capacity 10-fold and a refusal to negotiate further.

The president announced Sunday that the country would build 10 more enrichment facilities, despite the widespread belief that Iran simply does not have the resources to match its boasts.

Iran currently has one operating enrichment facility that has churned out around 3,300 pounds of 3.5 percent enriched uranium over the past years, but the country needs fuel enriched to 20 percent to power a medical research reactor.

"I declare here that with the grace of God, the Iranian nation will produce 20 percent (enriched uranium) and anything it needs itself," Ahmadinejad told a cheering crowd of thousands in the central city Isfahan.

"We told them, give us the 20 percent fuel (in an exchange)," he said. "But then they started adding conditions. So we said, if you want to give us the fuel we'll take it. If not, then fine and goodbye."

Iran has yet to give an official rejection of the International Atomic Energy Agency's proposal.

Era of 'childish games'
The escalation in Iranian rhetoric follows Friday's resolution by the IAEA for Iran to cease all enrichment immediately and to halt construction on a recently revealed uranium enriching facility hidden in a mountain.

Iran reacted with anger promising new plants and on Tuesday Ahmadinejad said he was considering decreasing cooperation with the IAEA, the world's only eye into the secretive country's nuclear program.

"We were interested, from the beginning, to solve all the problems related to the nuclear issue," he said. "Now, the issue, in our opinion, is over. No matter how much hue and cry they make."

In his speech Wednesday in Isfahan, Ahmadinejad further slammed the IAEA as being a tool of the Western powers hostile to Iran.

"They (Western countries) once again showed that they are not committed to the law. They make use of international bodies as tools ... the era of such childish games are over," he said.

While Iran maintains its nuclear program is only for peaceful purposes to produce electricity, the process of enriching uranium for fuel can be taken further, to levels around 90 percent, and produce material for a nuclear warhead.

The idea behind the swap was to get the bulk of Iran's uranium out of the country so it would not have enough material build a bomb.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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