President Hassan Rouhani said on Tuesday that Iran would resume uranium enrichment at an underground plant south of Tehran in its latest step back from a troubled 2015 agreement with major powers.

The suspension of all enrichment at the Fordow plant in the mountains near Qom was one of the restrictions on its nuclear activities that Iran accepted in return for the lifting of international sanctions.

But Washington`s abandonment of the deal in May last year followed by its reimposition of crippling sanctions prompted Iran to begin a phased suspension of its own commitments in May this year.

Under the terms of the agreement, Iran has retained more than 1,000 first-generation centrifuges at the Fordow plant, which have been running empty or remained idle since it took effect.

`Starting from tomorrow (Wednesday), we will begin injecting (uranium hexafluoride) gas at Fordow,` Rouhani said in a speech broadcast by state television.

His announcement came a day after tensions flared anew on the 40th anniversary of the US embassy siege and hostage crisis, with thousands in Tehran taking to the streets and Washington imposing fresh sanctions.

Iran said the resumption of enrichment at Fordow would be carried out transparently and witnessed by inspectors from the United Nations nuclear watchdog, the International Atomic Energy Agency.

But the European Union voiced disquiet at the new step away from the 2015 deal.

`We are concerned by President Rouhani`s announcement today to further reduce Iran`s commitments,` EU spokeswoman Maja Kocijancic told reporters.

France urged Iran to `go back on its decisions, which contradict the accord.` Russia too expressed worry, despite its good relations with Iran.

`We are monitoring the development of the situation with concern, President Vladimir Putin`s spokesman Dmitry Peskov told reporters.

`We support the preservation of this deal.` At the same time, Peskov said Moscow understood Tehran`s concerns over the `unprecedented and illegal sanctions` imposed by Washington.