Iran has fiercely defended its right to develop nuclear technology for what it says are peaceful purposes [Reuters]

Iran has begun uranium enrichment at a new underground site built to withstand possible airstrikes, a leading hard-line newspaper has reported in another show of defiance against Western pressure to rein in Tehran’s nuclear program.

The operations at the bunker-like facility south of Tehran, reported by the Kayhan daily newspaper, are small in comparison to Iran’s main enrichment site. But the centrifuges at the underground labs are considered more efficient and are shielded from aerial surveillance and protected against airstrikes by up to 90m of mountain rock.

Uranium enrichment is at the core of the international standoff over Iran’s nuclear program. The US and its allies fear Iran could use its enrichment facilities to develop high-grade nuclear material for warheads.

Iran – which claims it only seeks nuclear reactors for energy and research – has sharply increased its threats and military posturing against stronger pressures, including US sanctions targeting Iran’s Central Bank in attempts to complicate its ability to sell oil.

A senior commander of the Revolutionary Guard force was quoted as saying Tehran’s leadership has decided to order the closure of the Strait of Hormuz, a strategic oil route, if the country’s petroleum exports are blocked.

Revolutionary Guard ground forces also staged war games in eastern Iran in an apparent display of resolve against US forces just over the border in Afghanistan.

Iran’s nuclear chief, Fereidoun Abbasi, had told Keyhan on Saturday that Iran will “soon” begin enrichment at Fordow. It was impossible to immediately reconcile the two reports.

Iran has a major uranium enrichment facility in Natanz in central Iran, where nearly 8,000 centrifuges are operating. Tehran began enrichment at Natanz in 2006.

The US and Israel have not ruled out militant strikes against Iran if diplomacy continues to fail to resolve the dispute.

Iran disclosed the existence of Fordow to the IAEA only in September 2009, after learning that Western intelligence agencies had detected it.

Ban on unofficial money trade

Iran has been hit by four rounds of UN sanctions and the US and the EU have imposed increasingly tight economic sanctions on Tehran over its nuclear programme.

Iran’s parliament cracked down on unofficial money traders on Sunday after new US sanctions helped trigger a currency crash as Iranians rushed to buy dollars.

The rial lost about 20 per cent of its value against the dollar before the central bank intervened last week to try to stem further losses by injecting hard currency into the market.

At a special parliamentary debate on the currency crisis, lawmakers passed a measure imposing legal penalties on touts who sell foreign currencies outside official exchange offices and banks where rates can be subjected to government controls.

The measure may scare away touts, a common sight in parts of Tehran where they wave wads of currency at passing motorists.

But it will have no immediate impact on the price most Iranians have to pay for dollars which, even at licensed

exchange offices, sell at a 40 per cent premium over the central bank’s “reference rate”.