Isfahan, Iran ? Iran stepped up its confrontation with the West over its nuclear program, restarting work at a uranium conversion facility Monday in a move the United States and Europe have warned will prompt them to seek U.N. sanctions.

The resumption strikes a blow at European efforts to persuade Iran to rein in a program that Washington says is intended to develop nuclear weapons. Over the weekend, Iran, which says it aims only to produce electricity, rejected European proposals for economic incentives in return for limiting its nuclear activities.

The U.N. nuclear watchdog, the International Atomic Energy Agency, will hold an emergency meeting of its 35-member board of governors today to discuss the standoff with Iran.

Critics of Tehran question why Iran, which has vast reserves of petroleum, would need nuclear energy. Iran has responded by pointing out that it was Washington which first urged it to pursue a nuclear energy program while the pro-U.S. shah was in power.

France, Germany, Britain and the United States are likely to push for Iran to be referred to the U.N. Security Council, where they could seek new economic sanctions. But sanctions are far from a sure thing: Russia, which has helped Iran build its first nuclear reactor, and China, which has been strengthening ties with Tehran, hold veto power in the council.

Two technicians carry a box containing uranium ore concentrate, known as yellowcake, Monday at the Uranium Conversion Facility of Iran, just outside the city of Isfahan, 255 miles south of the capital, Tehran. Iran resumed uranium conversion activities at the facility Monday.

“I think Iran should really bear in mind that this step is a step in the wrong direction,” German Foreign Minister Joschka Fischer said, according to ZDF television. But he suggested negotiations could continue, saying: “We are trying to prevent a negative trend with fatal consequences.”

U.S. State Department spokesman Adam Ereli accused Iran of “thumbing its nose at a productive approach.”

Tehran suspended its nuclear activities in November to avoid sanctions and as a gesture in the negotiations with Europe. But it has expressed frustration with the talks and has been threatening for weeks to resume part of the program – work done at the Uranium Conversion Facility outside the city of Isfahan.

On Monday, work at Isfahan resumed, after IAEA inspectors installed cameras and other surveillance equipment intended to ensure no nuclear material is diverted. Iranian technicians in white suits and surgical masks rolled out barrels of yellowcake – raw uranium – to begin the conversion process.

Iran has insisted it has the right under the Nuclear Nonproliferation Treaty to carry out the entire fuel cycle – from raw uranium to fuel for a reactor. Europe fears that if Iran can develop fuel on its own, it will secretly produce material for a bomb.