Iran says it has successfully produced and tested fuel rods for use in its nuclear power plants. Iranian state television reported this on Sunday, in a snub to international demands that it halt sensitive nuclear work.

The rods were made in Iran and contain natural uranium. They have been inserted into the core of Tehran's nuclear research facility which Iran claims is for medical research. The development was announced at a time of growing tension between Western powers and Iran after the U.N. nuclear agency reported in November that Tehran appears to have worked on designing a nuclear weapon.

Iran's decision last year to raise the enrichment level from the 3-point-5 percent purity needed for civilian power plant fuel to 20 percent worried Western states that feel this will bring Tehran much closer to the 90 percent suitable for an atomic bomb.

Tehran has so far refused to change its nuclear course but claims it is ready to hold new talks to resolve the dispute.

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