The United States has said Iran is "moving in the wrong direction" after its announcement that it has successfully enriched uranium.
Mahmoud Ahmadinejad says Iran's intentions are peaceful
Iran's President Mahmoud Ahmadinejad said Iran had become the latest nation with "nuclear technology".
The US said defiance of UN calls to cease nuclear activities isolated Iran and its people. Meanwhile Russia urged Tehran to halt all enrichment work.
The head of the UN's nuclear watchdog is due in Tehran to discuss the crisis.
A senior Iranian official, speaking to the Reuters news agency on condition of anonymity, dismissed Russia's call, saying: "Iran's nuclear activities are like a waterfall which has begun to flow. It cannot be stopped."
'Right to technology'
Iran made its announcement on Tuesday, two months after resuming enrichment research in February.
In a televised speech, Mr Ahmadinejad said: "I am officially announcing that Iran has joined the group of those countries which have nuclear technology."
His audience broke into cheers and chants of "Allahu akbar" (God is great).
Mr Ahmadinejad called on the nation's scientists to press ahead with "industrial-scale enrichment" and urged the West to respect what he called Iran's right to peaceful atomic technology.
He said the "nuclear fuel cycle had been completed" with the enrichment on Sunday at the Natanz plant.
Western powers fear Iran is developing a nuclear bomb.
Last month the UN gave Iran 30 days to halt work or face action, including potential sanctions.
US state department spokesman Sean McCormack said: "We would have hoped that the Iranian regime would have taken this opportunity to choose a pathway of diplomacy as opposed to the pathway of defiance."
NUCLEAR FUEL CYCLE
Mined uranium ore is purified and reconstituted into solid form known as yellowcake
Yellowcake is chemically processed and converted into a gas by heating it to above 64C (147F)
Gas is fed through centrifuges, where its isotopes separate and process is repeated until uranium is enriched
Low-level enriched uranium is used for nuclear fuel
Highly enriched uranium can be used in nuclear weapons
Mohamed ElBaradei, the head of the UN watchdog, the International Atomic Energy Agency (IAEA), is expected to arrive in Iran on Wednesday to discuss its nuclear programme.
He has to report back to the Security Council at the end of this month, after which it will decide its next move.
Council members Russia and China may object to calls for sanctions from the US and Western countries.
However, some diplomats in Vienna are hoping that Iran's mastery of this technology may make it easier for Tehran to offer concessions without losing face.
They argue that Iran could now decide to suspend uranium enrichment in an attempt to stave off punitive action by the Security Council, says the BBC's Bethany Bell in Vienna, where the IAEA is based.
Iran said it had operated 164 centrifuges, creating the cascade required to achieve "industrial output" of enriched uranium.
But the process would only create the low-level enrichment needed for nuclear fuel.
Iran would need thousands of centrifuges to create the highly enriched uranium needed for nuclear weapons.
Experts say Iran is years away from having a nuclear bomb.