Iran on Monday halted production of 20 percent enriched uranium as an interim deal with world powers on Tehran's disputed nuclear programme came into force.
"In line with the implementation of the Geneva joint plan of action, Iran suspended the production of 20 percent enriched uranium in the presence of UN nuclear watchdog inspectors at Natanz and Fordo sites," Mohammad Amiri, director general for safeguards at Iran's Atomic Energy Organisation, told the official IRNA news agency.
"The process of diluting and turning the 196-kilogram (431-pound) stockpile of 20 percent enriched uranium into oxide has also started," Amiri said.
UN inspectors from the International Atomic Energy Agency confirmed that the freeze had begun, diplomats said in Vienna, the watchdog's headquarters.
"It's all fine, all their requirements have been fulfilled," one envoy to the IAEA said in comments echoed by other diplomats.
The diplomats said an IAEA report had been sent to member states confirming the start of the freeze.
The IAEA declined to comment.
The suspension starts the clock on negotiating a trickier long-term accord aimed at ending the Iran nuclear standoff and averting war once and for all, a process threatened, however, by possible new US sanctions.
On day one, Iran has to halt enrichment of uranium to medium levels -- close to weapons-grade -- and to begin diluting half its stockpile of this material.
If the IAEA gives the thumbs-up, EU foreign ministers will adopt legislation loosening sanctions on items including car parts and gold, followed later Monday by a similar move in Washington.
Over the next six months Iran will also not instal or switch on new nuclear machines and will grant the IAEA more access, including daily visits to the Fordo and Natanz enrichment facilities.
The total sanctions relief -- staggered over the six months -- is worth some $6-7 billion, including $4.2 billion in frozen overseas assets. The first $550 million instalment is due February 1.
But the core sanctions will still bite. Over the next half-year alone, Iran will miss out on $30 billion in oil revenues, the White House says.
Most of Tehran's $100 billion in foreign exchange holdings remains off-limits.
Iran and the P5+1 -- the US, China, Russia, Britain, France and Germany -- will soon begin talks on a long-term comprehensive accord.
Mark Fitzpatrick, a former US State Department official now at the International Institute for Strategic Studies, said the powers will want Iran to slash the number of centrifuges to 3,000-4,000 from the current 19,000.
In addition Iran will have to mothball Fordo; change the Arak reactor under construction so it cannot produce weapons-grade plutonium; and cut the stockpile of low-enriched uranium to less than a bomb's worth, Fitzpatrick told AFP.
Coupled with tighter inspections, this would not remove entirely Iran's capability to make nuclear weapons -- it denies having this aim -- but it would make it considerably more difficult. According to US President Barack Obama it would be "impossible".
Agreeing the interim deal was hard enough, and neither side is under any illusions about the difficulty of securing a long-term agreement.
'A long journey'
Obama said in December he saw the chances at "50-50", a "highly optimistic" assessment, Fitzpatrick believes/
Iran's relatively moderate President Hassan Rouhani has warned of a "long journey".
Even if a deal is reached, its terms may be too tough for hardliners in Iran and too lax for their US counterparts and Iran's arch-enemy Israel, the Middle East's sole if undeclared nuclear power.
Conservative newspapers on Monday opposed implementing the deal.
Under the headline "Nuclear holocaust", Vatan-e Emrooz said that the Geneva accord will see most of Iran's nuclear activities come to a halt.
A push by US lawmakers -- including some from Obama's own party -- to impose new sanctions could also scupper the process since this would contravene the interim deal.
This would "send the message to Tehran that the United States is unable to hold up its end of the bargain," Kelsey Davenport from the Arms Control Association told AFP, "likely derailing the initial deal and jeopardising negotiations on the comprehensive agreement".