Revelations that Iran is constructing a secret subterranean facility to produce weapons-grade uranium drew a chorus of condemnation from global leaders Friday, amid accusations that the Islamic republic is threatening global security.

The intelligence report about the installation, which is being built inside a mountain in the country's arid interior, has also raised concerns that Israel could mount a pre-emptive air strike that could plunge the region into conflict.

U.S. President Barack Obama said he favoured a diplomatic resolution to the brewing crisis and he said that Iran must disclose all its nuclear efforts, including possible ones towards weapons development, "or be held accountable."

That statement was echoed by Britain's Prime Minister Gordon Brown, France's President Nicolas Sarkozy and Prime Minister Stephen Harper.

"Canada is deeply troubled by the recent revelation that Iran has been building a covert uranium enrichment facility for several years," Harper said Friday in a statement.

"We condemn Iran's continued refusal to meet its obligations under UN Security Council resolutions and International Atomic Energy (Agency) requirements. Iran's actions threaten regional stability and international peace and security."

But Iran's President Mahmoud Ahmadinejad told a Friday news conference that it had complied with UN rules. Those rules require Iran to notify the IAEA six months before a uranium enrichment plant becomes operational.

The IAEA said Iran must notify them when it begins design of such facilities.

Ahmadinejad said Obama would come to regret his statement, but dodged questions about whether Iran had enough enriched uranium to build a nuclear weapon.

Robert Fife, CTV's Ottawa Bureau Chief, said from Pittsburgh that Russian and Chinese leaders were shown top-secret plans of the nuclear site Thursday night.

"Senior U.S. officials said they didn't want to bring this intelligence forward until they were absolutely sure that this facility was almost ready to make weapons-grade material, and they say it is within two months or so of being able to produce weapons-grade uranium," he said.

They want to get the Chinese and Russians on side, Fife said.

China, which holds veto power on the UN Security Council, has long said no significant pressure should be put on Iran, Fife said, but added there seems to be wavering on the part of both China and Russia.

At his closing news conference, reporters asked Harper if he supported military action against Iran.

"These are highly speculative questions, highly hypothetical," he said. "Nobody to my knowledge has put those kinds of actions on the table."

Israel's Prime Minister Benjamin Netanyahu said earlier this week that "all options are on the table" and Israel "reserves the right of self-defence."

Ahmadinejad has a long history of making extreme anti-Israel statements.

Disclosure to IAEA

Iran informed IAEA chief Mohamed ElBaradei about the existence of the previously undeclared plant in a letter earlier this week.

IAEA spokesperson Marc Vidricaire later confirmed that the letter had been received by the organization, saying it had learned "that a new pilot enrichment plant is under construction."

The letter sent to the IAEA chief indicated that the Iran plant would not enrich uranium beyond the five per cent level needed for civilian energy production. Such fuel would need to be enriched to 90 per cent and beyond to be used in a nuclear weapon.

Iran told the agency "that no nuclear material has been introduced into the facility," Vidricaire said. "In response, the IAEA has requested Iran to provide specific information and access to the facility as soon as possible."

It contained no details about the location of the facility, though one official with access to Western intelligence said that it was located about 160 kilometres southwest of Tehran. The official said it had more than 3,000 centrifuges located at the site.

A senior White House official told The Associated Press that Washington has known about the plant's existence "for several years."

Prior nuclear production

Prior to Tehran's disclosure about the secret site, the country was publicly known only to have one such plant, which is monitored by the IAEA. The underground facility in the southern city of Natanz is believed to have more than 8,000 centrifuges on site, though just over half are fully active, according to the most recent IAEA report.

Outside of Iran, many members of the international community fear that Tehran will eventually use the technology and fuel to create materials for weapons.

The controversy over the second plant may well hinder talks scheduled to take place Oct. 1, between Iran and six world powers. At that meeting, the five permanent UN Security Council members and Germany plan to pressure Iran to cut back on its enrichment activities.

German Chancellor Angela Merkel said her county views the existence of a second plant as "a grave development" and she called for Iran to answer IAEA questions "as quickly as possible."

Existing sanctions

Iran has long denied allegations of undeclared nuclear activities. It remains under three sets of UN Security Council sanctions over its refusal to end its enrichment activities at the Natanz facility.

In an interview published in the German weekly Der Spiegel on Friday, Iran's nuclear negotiator said Tehran did not fear additional sanctions from the UN Security Council.

Saeed Jalili told Der Spiegel that Iran has "the right to uranium enrichment, and we will never give up this right."

"We have lived with sanctions for 30 years, and they cannot force a great nation like the Iranian one to its knees," Jalili said. "They do not scare us. On the contrary: we welcome new sanctions."

Mark Fitzpatrick, senior fellow for nonproliferation at the International Institute for Strategic Studies, said that Iran was likely forced to disclose the existence of the second plant ahead of the G-20 summit for political reasons.

"Iran undoubtedly announced it to the to the IAEA because they were afraid it would become known to the U.S. and others," he said.

Fitzpatrick said the disclosure "will add to the momentum behind a push for stronger sanctions on Iran" should the Oct. 1 talks in Geneva fail.

With files from The Associated Press