US President George W Bush says the international community must "redouble" efforts to prevent Iran obtaining nuclear weapons.
Iran produces uranium gas at a plant near Isfahan
He spoke after reports Iran had stepped up work to enrich uranium by activating a second cascade of centrifuges at its Natanz plant.
Feeding gas into centrifuges can produce fuel for nuclear power plants or, ultimately, atomic weapons.
Mr Bush said he was aware of the "speculation" and condemned the move.
"Whether they doubled it or not, the idea of Iran having a nuclear weapon is unacceptable," Mr Bush said.
"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 programme."
Iran says its enrichment work is aimed at generating electricity, but the US and other Western nations fear Iran is trying to acquire nuclear weapons.
The move is being seen as an act of international defiance by Teheran, given demands by the UN Security Council that it suspend uranium enrichment, says the BBC's Pam O'Toole.
The permanent members of the Security Council are meeting in New York to discuss sanctions over Iran's failure to meet an August deadline to stop enrichment.
The report that a second cascade of centrifuges had been activated at Tehran's enrichment plant at Natanz came from the semi-official Isna agency.
ENRICHING URANIUM: CASCADES
For uranium to be used as nuclear fuel, its concentration of uranium-235 isotopes must be increased
To be used in a reactor, uranium must contain 2-3% U-235
Weapons grade or highly enriched uranium (HEU) has a concentration of at least 90% U-235
Gas centrifuges are used to carry out this enrichment process
Cascades are chains of these centrifuges
3,000 of the type of centrifuges Iran is using would produce enough HEU for one nuclear bomb, analysts say
The report suggested that scientists had injected gas into the second cascade, and quoted its unnamed source as saying the second cascade's "product" had been obtained.
The second cascade had been installed two weeks ago with the knowledge of UN nuclear inspectors, the source said.
"The International Atomic Energy Agency has been fully aware of the issue and the inspectors are present in Iran," the source said.
Installation of the second cascade in itself is not a major technological breakthrough, our correspondent says.
Experts admit that it would take years for it to install the many thousands of centrifuges required and master the specialised technology required to do so.
Even so, some Western diplomats have expressed unease at Iran's progress.
They fear that even operating a few cascades of centrifuges helps Tehran to develop knowledge of the fuel cycle, making it easier for Iran to go underground with a covert weapons programme in the future, our correspondent adds.
Iran's first cascade, consisting of 168 centrifuges, produced a small quantity of enriched uranium in February.
Tehran has said it plans to install 3,000 centrifuges in Natanz by March, something scientists say appears optimistic, our correspondent adds.