The Islamic republic also threatened to abandon more commitments unless a solution is found with the remaining parties to the landmark 2015 agreement after Washington unilaterally pulled out.

US Secretary of State Mike Pompeo tweeted Sunday that Iran would face "further isolation and sanctions", adding to a raft of biting economic measures imposed by Washington, and President Donald Trump warned that Iran "better be careful."

The 2015 deal was reached between Iran and six world powers -- Britain, China, France, Germany, the United States and Russia -- and saw Tehran agree to drastically scale down its nuclear programme in exchange for sanctions relief.

Washington began reimposing sanctions in August 2018 and has targeted crucial sectors including oil exports and the banking system, fuelling a deep recession.

Even after the US pullout, experts said Iran had been complying with the agreement, until early this month when it exceeded a limit on its enriched uranium reserves.

Iranian Foreign Minister Mohammad Javad Zarif said Tehran could further scale back its commitments to the deal, but "all such steps are reversible" if European partners deliver on their part.

The move to start enriching uranium above the agreed maximum purification level of 3.67 percent comes despite opposition from countries backing the nuclear deal.

Britain said Iran had "broken the terms" of the accord, and along with Germany urged Tehran to "stop and reverse all activities inconsistent with its commitments."

President Hassan Rouhani's order to exceed the threshold would be implemented "in a few hours" after the last technical details were sorted, Iran's Atomic Energy Organisation spokesman Behrouz Kamalvandi said live on state television.

Rouhani initially flagged Tehran's intentions on May 8, exactly a year on from Trump's abandoning the pact.

The Iranian president has said the move is in response to a failure by remaining parties to help Tehran work around sanctions already reimposed by the US.

- War of words -

The arch-rivals have been locked in an escalating war of words with Washington blaming Iran for a series of attacks on tanker ships and Tehran shooting down an American surveillance drone, raising fears of a conflict that both sides have said they want to avoid.

The International Atomic Energy Agency (IAEA) confirmed this month that Iran has exceeded a 300-kilogramme limit on enriched uranium reserves, a cap that was imposed by the 2015 deal.

Deputy Foreign Minister Abbas Araghchi on Sunday singled out Iran's declining oil sales and the effect of financial sanctions as the main issues that needed to be solved, or Tehran would further step back from its nuclear commitments.

"We hope we can reach a solution, otherwise after 60 days we will take the third step as well," he said, adding that Tehran would give further details at an "opportune moment".

Iran had previously threatened to also resume building as of July 7 a heavy water reactor -- capable of one day producing plutonium -- in Arak in central Iran, a project that had been mothballed under the agreement.

However, since Iran delivered its ultimatum on the Arak reactor "good technical progress" had been made with parties on modernising the facility in a way that would not produce military grade plutonium, convincing Iran to postpone its decision, Araghchi said.

 'At any level' 

Iran's Atomic Energy Organisation is fully ready to enrich uranium "at any amount and at any level" if ordered to do so, its spokesman Kamalvandi said.

A top advisor to Iran's Supreme Leader Ayatollah Ali Khamenei hinted Friday it could reach five percent.

The 3.67 percent enrichment limit set in the agreement is far below the more than 90 percent level required for a nuclear warhead.

Iran says that it is not violating the deal, citing terms of the agreement allowing one side to temporarily abandon some of commitments if it deems the other side is not respecting its part of the accord.

France expressed "great concern" and demanded Tehran "Iran halt all activities that do not meet its commitments," a foreign ministry spokeswoman said.

French President Emmanuel Macron spoke to Rouhani by phone Saturday and pledged to "explore by July 15 the conditions for a resumption of dialogue between all parties," according to a statement from the Elysee Palace.

Iran says it exercised "strategic patience" for a year after the US withdrawal, waiting for the remaining partners to make good on promised economic benefits.