Tehran, Iran ? Iran stepped up its uranium enrichment program Friday, a semiofficial news agency reported, even as a divided U.N. Security Council considered a European draft resolution to impose sanctions for Tehran’s nuclear activities.

President Bush called the report that Iran had doubled its enrichment capacity “speculation” but said a nuclear-armed Iran was unacceptable.

Iran’s injection of gas into a second network of centrifuges, reported by the Iranian Students News Agency, marked the country’s first known uranium enrichment since February.

The process – which yields either nuclear fuel or material for a warhead – did not represent a major technological breakthrough and was unlikely to bring Iran within grasp of a weapon.

But it signaled Tehran’s resolve to expand its atomic program at a time of divisions within the Security Council about a punishment for Iran’s defiance.

Washington has long pushed for sanctions against Iran for its failure to stop enriching uranium – a process Tehran says aims only to generate electricity and others suspect is a cover for building nuclear arms.

Russia and China, with strong commercial ties to Tehran, have shied from punitive measures and left the door open to last-minute talks.

All three, plus France and Britain, have veto power on the Security Council, which is weighing a draft resolution that would impose limited sanctions on Iran.

“We are injecting gas into the second cascade (of centrifuges), which we installed two weeks ago,” the Iranian Students News Agency quoted an anonymous official as saying.

Iran’s government sometimes uses the news agency to leak information deemed too sensitive for official channels.

Friday’s procedure was successful, and the second cascade doubled Iran’s capacity to enrich uranium, the agency said.