Talks on Iran's nuclear programme aimed at salvaging a 2015 nuclear deal wrapped up on Saturday, a day after Tehran said it had started producing uranium at 60 per cent purity.
The International Atomic Energy Agency later verified that Iran was pushing for 60 per cent enrichment and was currently at 55 per cent.
The 2015 nuclear deal, known as the Joint Comprehensive Plan of Action, or JCPOA, limited Iranian uranium enrichment to 3.67 per cent.
To construct a nuclear device, uranium must be enriched to over 90 per cent purity.
Iran had declared it would sharply increase its enrichment of uranium earlier this week, after an attack on its Natanz nuclear facility that it blamed on arch-foe Israel.
On Friday, US President Joe Biden said that Iran's move to raise uranium enrichment was not "helpful."
“We are, though, nonetheless pleased that Iran has continued to agree to engage in indirect discussion with us and with our partners on how we move forward and what is needed to allow us to move back into the nuclear deal" said Mr Biden.
“It’s premature to make a judgment on what the outcome will be but we’re still talking,” he said.
The incidents cast a shadow over talks in Vienna aimed at rescuing the nuclear agreement between Iran and world powers that then US president Donald Trump abandoned almost three years ago.
The European Union said Saturday's talks would involve EU officials and representatives from Britain, China, France, Germany, Russia and Iran.
The talks are aimed at determining which sanctions the United States should lift and the measures Iran has to take to come into compliance with the accord.
The Russian ambassador to Vienna, Mikhail Ulyanov, spoke of "slow but steady progress in the negotiations on restoration of the nuclear deal" on Twitter.
EU diplomat Enrique Mora was also cautiously optimistic, saying that talks had made progress despite difficult circumstances. China's ambassador to the International Atomic Energy Agency, Wang Qun, also told reporters that the coming days would see more detailed talks.
"All parties have agreed to further pick up their pace in subsequent days by engaging in more extensive, substantive work on sanctions-lifting," he said.
Iran’s chief negotiator, Deputy Foreign Minister Abbas Araghchi said after Saturday’s talks that "a new understanding appears to be emerging", even though serious disagreements remain.
The negotiations had reached a stage where work on a common text, "at least in areas where there are common views", could begin, he told Iranian state media.
Ali Akbar Salehi, head of the Atomic Energy Organisation of Iran, confirmed Iran was now producing uranium enriched to 60 per cent purity, taking the country closer to the 90 per cent level required for use in a nuclear weapon.
"The enrichment of uranium to 60 per cent is underway" in Natanz, he said, quoted by Tasnim news agency.
Iran has repeatedly insisted it is not seeking an atomic bomb, but at that rate of production, it could take the Islamic republic 322 days to produce the amount of 60 per cent enriched uranium needed to make one bomb, based on the International Atomic Energy Agency's (IAEA) criteria.
But this would require Iran to have a sufficient amount of 20 per cent enriched uranium, which it does not have, according to the latest IAEA data.
"The [IAEA on Saturday] verified that Iran had begun the production of UF6 enriched up to 60 per cent... at the (above-ground) Natanz Pilot Fuel Enrichment Plant," the IAEA said in a statement.
Tehran has gradually rolled back its nuclear commitments since 2019, a year after Washington withdrew from the accord and began imposing sanctions.
The 2015 deal, known formally as the Joint Comprehensive Plan of Action (JCPOA), gave Iran relief from sanctions in return for curbs on its nuclear programme.
Under the accord, Iran had committed to keep enrichment to 3.67 per cent, though it had stepped this up to 20 per cent in January.
Negotiations aimed at ensuring the return of the United States to the JCPOA and the lifting of sanctions resumed this week in Vienna.
Iran also announced on Saturday that a suspect in the Natanz sabotage incident had been identified as a 43-year-old Iranian national, “Reza Karimi.” He left Iran before sabotaging the Natanz facility’s power grid, causing a blackout and damaging a number of centrifuges, government-linked media said.
Iran's allegation could not be immediately verified. Government-linked media released a picture of what it said was an "Interpol red notice" for Karimi's arrest. Interpol's website, which announces red notices, carried no such call for the arrest of anyone bearing his name.