By Aresu Eqbali and Jared Malsin

TEHRAN -- Iran said Monday it has resumed enriching uranium to 20% purity, exceeding limits set in a 2015 nuclear deal and slashing the time it would take for Tehran to produce the grade of fuel needed for a nuclear weapon.

The nuclear activity, which returns Iran to an enrichment level it last reached before entering the international accord, dials up pressure on Washington and crosses a red line set by European countries that remained committed to the agreement after the Trump administration withdrew from it in 2018.

The move threatens to complicate President-elect Joe Biden's plan to rejoin the deal that placed limits on Tehran's nuclear program, but which floundered after the U.S. left it and reimposed crippling economic sanctions on Tehran. Mr. Biden has said the U.S. would rejoin the deal as long as Iran complies with its terms.

The enrichment activity also raises tensions in the Middle East when the region is already on edge during the waning days of the Trump administration.

Tehran has vowed to avenge the killings of a top Iranian nuclear scientist in November and a senior Iranian general, who died in a U.S. drone strike last January. The strike followed a year of spiraling hostilities in the region that included explosions on oil tankers and an attack on Saudi oil facilities that the U.S. blamed on Iran. Tehran has denied involvement in the explosions and the Saudi attack.

Iranian forces seized a South Korea-flagged ship on Monday, according to a semiofficial Iranian news agency, heightening tensions with a U.S. ally. Forces boarded the vessel because it was creating unspecified pollution in the Persian Gulf, the agency said. The vessel's owner, DM Shipping of Busan, South Korea, didn't respond to calls.

Tehran is in a dispute with South Korea over Seoul's refusal to unlock frozen oil-revenue accounts to pay for Covid-19 vaccines and other humanitarian goods.

Iran has previously seized vessels from countries with which it has had disputes. In 2019, Tehran detained a British-owned tanker for months after the U.K. seized an Iranian vessel that was on its way to Syria.

An Iranian government spokesman defended on Monday the decision to lift the enrichment levels, saying it complied with a law passed by Parliament in December. President Hassan Rouhani had said he opposed the move, urging caution with respect to actions that could provoke hostilities with the West.

"The government finds itself obliged to carry out this law," said the spokesman, Ali Rabie. The enrichment is taking place at the Fordow nuclear facility beneath a mountain south of Tehran, he said.

The heightened level of enrichment cuts the time it would take for Iran to create weapons-grade uranium, which is 90% enriched. Expert estimates vary for how long it would now take Iran to build a nuclear weapon, with some saying it would take at least a year.

David Albright, a former weapons inspector and president of the Institute for Science and International Security, a security think tank in Washington, estimated that it would take a total of six to nine months to build a nuclear explosive, prepare a test site and carry out a nuclear test.

President Trump's withdrawal from the nuclear agreement reimposed economic sanctions on Tehran and launched an era of renewed hostilities with Iran and its allies in the Middle East.

Iran told the International Atomic Energy Agency on Dec. 31 that it planned to proceed with 20% enrichment, the agency has said.

IAEA Director General Rafael Grossi confirmed to member states on Monday that Iran began feeding uranium that was already enriched up to 4.1% into six centrifuge cascades at the Fordow facility for enrichment up to 20%. The agency said its inspectors were present at the nuclear site to detach the agency's seal from a cylinder containing the uranium supply.

The increase in uranium enrichment levels accelerates Iran's approach, in which it had been gradually increasing uranium enrichment as it ramps up pressure on Western countries, reaching 4.5% purity last year. The 2015 deal limits Iran to 3.67% purity.

The increased nuclear activity and the Dec. 1 law that set it in motion could be designed to improve Iran's position in negotiations toward a revival of the 2015 nuclear deal under Mr. Biden, who will be inaugurated as president on Jan. 20.

"Iran is trying to build as much leverage as it can between now and then, " said Ariane Tabatabai, an Iran expert at the Alliance for Securing Democracy at the German Marshall Fund, a policy think tank. "The point is to go back to 2016 without any preconditions."

Iran's Foreign Minister Javad Zarif said the nuclear activity was in response to noncompliance by other members of the agreement. "Our measures are fully reversible upon FULL compliance by ALL," he said on Twitter on Monday.

Tensions between Iran and its opponents have soared since the killing of Iran's top nuclear scientist, Mohsen Fakhrizadeh, who died in an attack on his car outside of Tehran in late November. Iranian leaders accused Israel of carrying out the attack. Israel has neither confirmed nor denied any involvement.

The assassination further unsettled the Middle East in a tense period as the region awaits the inauguration of Mr. Biden, who has vowed to change course on U.S. policy toward the region following years of a pressure campaign on Iran carried out by the Trump administration.

The campaign included crippling economic sanctions and the January 2020 killing of Maj. Gen. Qassem Soleimani, a senior leader in Iran's Islamic Revolutionary Guard Corps and the architect of Iran's alliances with powerful militia groups that enhanced Tehran's influence across the Middle East.

Iranian proxy groups in the region called for revenge attacks against Americans and their allies, particularly in Iraq, on the anniversary of Gen. Soleimani's death on Jan. 3, which came and went without spectacular violence.

"These anniversaries are big. This is a way for Iran to mark them, to say we didn't engage in revenge that we would be taking, but we are doing things," said Ms. Tabatabai, referring to the uranium enrichment.

Iran's accelerated nuclear activity also exposed fissures within Iran's political system over how to respond to the killings and U.S.-led pressure on Tehran. President Rouhani, along with the country's foreign ministry and nuclear agency, criticized the law passed by parliament on Dec. 1, calling the legislation unnecessary. Supreme Leader Ali Khamenei decides major national security questions.

The law, which passed just days after the killing of Mr. Fakhrizadeh, also calls for Iran's nuclear agency to increase monthly production of low-enriched uranium to 500 kilograms from 150 kilograms. It also mandates that the country stop cooperating with the IAEA with two months, beyond what is required by safety protocols, unless banking and oil sanctions are lifted.

--Laurence Norman and Benoit Faucon contributed to this article.

Write to Jared Malsin at jared.malsin@wsj.com

(END) Dow Jones Newswires

01-04-21 1311ET