TEHERAN, Iran - Iranian and Western sources said on Monday Iran had switched on a uranium enrichment plant deep inside a mountain, a momentous step that aggravates Teheran's nuclear dispute with the West.

The moves come at a time when new US sanctions imposed over Iran's nuclear program are causing real economic pain. Teheran has responded with threats to international shipping that have spooked oil markets. And a parliamentary election in two months is widening Iran's internal political divisions.

"The enrichment in Fordow has started," said an Iranian official who asked not to be identified. Two diplomats at the Vienna headquarters of the International Atomic Energy Agency, which has inspected the site, confirmed it.

Iran has long said it would begin enrichment of uranium at the site, deep under a mountain near the Shiite Muslim holy city of Qom, but some Western capitals may have hoped it could be persuaded to hold off to restart diplomacy to lift sanctions.

US man sentenced

Iran's judiciary has sentenced an Iranian-US citizen to death on charges of spying for the United States, its state radio reported on Monday, exacerbating Teheran-Washington tensions because of US-led sanctions on Iran's nuclear program, a charge that Iran denied.

Iran charges that as the former US Marine, 28-year-old Amir Mirzaei Hekmati, received special training and served at US military bases in Iraq and Afghanistan before heading to Iran for his alleged intelligence mission.

The radio report did not say when the verdict was issued.

Under Iranian law, he has 20 days to appeal.

Washington has demanded Hekmati's release, saying he has been "falsely" accused.

It also called on Iranian authorities to grant Swiss diplomats, who handle Washington's interests in the absence of US-Iran ties, access to Hekmati in prison.

Hekmati is a dual US-Iranian national.

Iran considers him an Iranian since the country's law does not recognize dual citizenship.

His conviction adds to a series of grave points of contention between Iran and the US over its controversial nuclear program.

Iran said it only seeks nuclear reactors for energy and research, but has warned it could retaliate against US sanctions by blocking Gulf oil shipping lanes through the Strait of Hormuz that are vital to the global economy if the West carries out mooted plans to bar Iranian crude exports.

China's position

On Monday, Chinese Foreign Ministry spokesman Liu Weimin reiterated China's position on Iran, saying it prefers dialogue rather than sanctions.

China has maintained "normal, open and transparent" ties with Iran in the fields of economics, trade and energy, which do not go against United Nations Security Council resolutions and "should not be affected".

A pipeline being built by the United Arab Emirates to export oil from east coast terminals, avoiding the Iran-threatened Strait of Hormuz, will be operational by June, its energy minister said on Monday.

China Daily-AP-Reuters