Iran's president has rejected UN Security Council sanctions against Tehran, insisting his country would press ahead with its nuclear program.

Mahmoud Ahmadinejad said the resolution passed on Saturday was a "piece of paper" adding that the 15 countries who voted in favor would regret it.

Iran said it would immediately begin installing 3,000 centrifuges at a uranium enrichment plant at Natanz.

The sanctions ban nuclear trade with Iran, but the US wants tougher curbs.

Mr Ahmadinejad said the West had lost its chance to improve relations with Iran.

"They seek to mobilize a group of their agents on the pretext of this piece of paper in order to sow seeds of discord among the Iranian nation," the Iranian Fars news agency reported him as saying.

"No matter [whether] they accept it or not, Iran is now an established nuclear state and it is in their interest to live alongside the Iranian nation."

A foreign ministry spokesman said the "continuation of peaceful nuclear activities" would be Iran's "best response" to the UN sanctions.

In the Iranian parliament, an overwhelming majority of deputies approved an emergency bill directing the government to review co-operation with the UN nuclear watchdog, the International Atomic Energy Agency (IAEA).

The UN sanctions, passed unanimously, ban the supply of nuclear materials to Iran and freeze some assets overseas.

The Security Council resolution demands that Tehran end all uranium enrichment work, which can produce fuel for nuclear plants as well as for bombs.

Traces of weapons-grade uranium were found at Natanz, in central Iran, during UN inspections in 2003, although this was later blamed on contaminated imported equipment.

Iran's plan to install thousands of centrifuges at Natanz would enable a vital stage of the process of enriching uranium into weapons-grade material.

Sanctions 'warning'

The Security Council backed sanctions against Iran after intense debate over the terms of the resolution.

The vote by the 15-member council took place exactly two months after Britain, France and Germany first introduced a draft resolution proposing sanctions.

The resolution, under Chapter Seven of Article 41 of the UN Charter, makes enforcement obligatory but limits action to non-military measures.

Acting US ambassador to the UN Alejandro Wolff said the resolution sent a "warning" to Iran.

"If necessary, we will not hesitate to return to this body if Iran does not take further steps to comply," Mr Wolff said.

But a senior official at the US state department, Nicholas Burns, said the UN resolution was not enough.

He said the US would try to persuade other countries, especially Russia, to impose stronger penalties individually.

"We don't think this resolution is enough in itself. We want to let the Iranians know that there is a big cost to them," he said.

The draft resolution was amended several times after objections from both the Russians and Chinese, which have close financial ties with Iran.

It was watered down to take account of Russian concerns over such provisions as a freeze on the assets abroad of specific Iranian individuals and organizations.

Russia is building a nuclear power station in Iran and China has significant oil interests there.

Photo Caption

Mahmoud Ahmadinejad, the Iranian president