Prime Minister Benjamin Netanyahu said the step was extremely dangerous and was designed to create atomic bombs, and again called on Europe to impose punitive sanctions on Tehran.
Iran has denied any intent to develop nuclear weapons.
The confrontation has taken on a military dimension, with Washington blaming Tehran for attacks on oil tankers, and Iran shooting down a U.S. drone, prompting aborted U.S. air strikes.
The Europeans, who object to Trump's withdrawal from the deal, have so far failed to salvage the pact by shielding Iran's economy from U.S. sanctions, which cost billions of dollars in lost oil sales.
French President Emmanuel Macron condemned Iran's decision as a "violation" of the pact which the United States pulled out of last year.
Iran must immediately stop and reverse its activities, a spokesman for Britain's Foreign Office said on Sunday."We are extremely concerned at Iran's announcement that it has started uranium enrichment above the limit of 3.67%," spokeswoman Maja Kocijancic for EU foreign policy chief Federica Mogherini said in a statement."We strongly urge Iran to stop and reverse all activities inconsistent with its commitments ... We are in contact with the other JCPoA (Joint Comprehensive Plan of Action) participants regarding the next steps under the terms of the JCPoA, including a Joint Commission," she said.“We had called upon Iran not to take further measures that undermine the nuclear deal. We strongly urge Iran to stop and reverse all activities inconsistent with its commitments under the JCPOA, including the production of low enriched uranium beyond the respective JCPOA stockpile limit,” Germany’s Foreign Ministry said.“While the UK remains fully committed to the deal, Iran must immediately stop and reverse all activities inconsistent with its obligations,” the UK’s Foreign Office said in a statement.Both the UK and the Germany added that they were “in contact with the other JCPOA participants regarding the next steps under the terms of the JCPOA, including a Joint Commission.”The German Foreign Ministry added that it was awaiting further information by the International Atomic Energy Agency (IAEA).France, Germany and the UK are among the six countries that signed the deal. The United States, which is also a signatory to the deal, exited the agreement last year.Energy Minister Yuval Steinitz described the move "as moderate", but accused Tehran on Sunday of breaking out of internationally agreed limitations on its nuclear projects and moving toward a potential bomb."Iran has begun - while it is a moderate rise right now - but it has begun to raise, to break out of the uranium enrichment curbs that were imposed on it," Steinitz told Israel's Ynet TV."It means... that it is brushing off the redlines that were agreed [upon and] that it has begun its march – a march that is not simple –toward nuclear weaponry," he added.Tension has spiked between Tehran and Washington since last year, when President Donald Trump quit the 2015 nuclear deal between Iran and six powers and reimposed sanctions that had been lifted under the pact in return for Tehran curbing its sensitive nuclear work.Under the deal, Iran can enrich uranium to 3.67% fissile material, well below the 20% it was reaching before the deal and the roughly 90% suitable for a nuclear weapon.In reaction to US sanctions, which have notably targeted its main foreign revenue stream in the form of crude oil exports, Iran said in May that it would scale back its commitments to the deal after a 60-day deadline.Ali Akbar Velayati, a senior adviser to Supreme Leader Ayatollah Ali Khamenei, said Iranian officials were unanimous in raising the level of uranium enrichment beyond the 3.67% set in the nuclear accord, in remarks posted on Khamenei’s officials website.“For example, we need uranium enriched to 5% for use in the Bushehr [power plant] and this is a completely peaceful purpose,” Velayati said, hinting that this might be the first step Iran might take in raising the enrichment level.The US has requested a special meeting of the UN International Atomic Energy Agency's 35-nation Board of Governors to discuss Iran, the US mission to the nuclear watchdog said on Friday.
Diplomats who follow the agency said they expected the meeting would be held Wednesday after the International Atomic Energy Agency last week said Iran had exceeded the maximum stock of enriched uranium allowed under its 2015 deal with major powers.US National Security Advisor John Bolton tweeted on Friday that “Iran must be pressured to abandon its nuclear ambitions.”