Iranian President Mahmoud Ahmadinejad has officially inaugurated a new plant to produce uranium fuel for a heavy-water nuclear reactor,  in a step likely to further exacerbate tensions over Iran's nuclear program.   Iran's president also used his appearance to say Iran is ready to hold talks on its nuclear program.

It was a day of jubilation for many Iranians who turned out to celebrate their country's nuclear program on the day their government had officially designated as national nuclear day.

President Mahmoud Ahmadinejad inaugurated a new plant to produce fuel for a heavy-water nuclear reactor in the city of Isfahan, in a move likely to increase fears in the West about Tehran's nuclear ambitions.

Until now, Iran has only taken the step of enriching uranium at its facility in Natanz to produce fuel for a light-water reactor. Producing fuel for the heavy water reactor could lead Iran to the capability to make plutonium, which can be used in a nuclear warhead.

Fears about Iran's nuclear intentions have been heightened by its refusal to allow inspectors from the International Atomic Energy Agency to visit the heavy water reactor.

Iran's nuclear chief Gholamreza Aghazadeh said Iran has now installed about 7,000 centrifuges at its Natanz uranium enrichment complex, 1,000 more than previously revealed.  Iranian officials also say they have tested a new more efficient type of centerfuge.

During his comments to mark the opening of the new nuclear facility, President Ahmadinejad said his country would be willing to hold talks with the United States and other western nations about its nuclear program, but only if the talks were based on what he called "respect and justice."

President Ahmadinejad has previously reacted coldly to U.S. President Barack Obama's offer to open a dialogue with Iran.

On Wednesday the United States said it would participate directly in talks with Iran over its nuclear program.  The Bush administration had refused to take direct part in the talks, which have been held between Iran and the five permanent members of the U.N. Security Council and Germany.

Despite President Ahmadinejad's statement of willingness for talks, he also used his appearance Thursday to denounce Western efforts to stymie Iran's nuclear program.

He says that the West has used every form of pressure imaginable, from international institutions such as the International Atomic Energy Agency, to economic pressures, to sanctions, to stop Iran from going ahead with it's nuclear program, but in spite of all this, we have succeeded,  and with many thanks to our scientists and young people.

Iran expert Meir Javedanfar of the Middle East Economic and Political Analysis Center in Tel Aviv says Mr. Ahmadinejad may be taking a hard line in preparation for Iran's upcoming presidential elections, this June.

"Judging by what I've heard, there a certain amount of electioneering involved in this," Javedanfar said. "The elections are coming up in Iran and we knew since February that Iran can produce these pellets. This is nothing new. We've known about this."

Thursday's ceremony celebrated the National Day of Nuclear Technology, the day in 2006 when Iran first enriched uranium at its facility in the town of Natanz. Since then, it is believed to have enriched enough uranium to build a bomb - though first the uranium would have to be more highly enriched, and it is not known if Iran has perfected such techniques.