"All options, including the military one, are on the table," Rumsfeld said in an interview with Monday's edition of German financial newspaper Handelsblatt.

"Today, biological, chemical and radiological weapons are available which could kill tens of thousands of people," Rumsfeld said, in comments in German.

"There is a genuine possibility that these weapons could fall into the hands of people who behead innocent people and blow up children.

"The people of the free world must realise that they have been warned."

Rumsfeld said Iran must be prevented from developing a nuclear weapon.

"We know that terrorists are desperately seeking ever more deadly weapons.

"Iran is the main sponsor of terrorist organisations such as Hezbollah and Hamas," he told Handelsblatt.

The Iranian nuclear crisis escalated on Saturday when the UN's International Atomic Energy Agency, voted to report the Islamic republic to the UN Security Council over its atomic programme.

Iran said on Monday that large-scale uranium enrichment work, which is the focus of fears that it is seeking nuclear weapons, would begin in "due course" in response to the IAEA decision.

Meanwhile, the International Atomic Energy Agency has been formally notified of Iran's decision to resume full-scale uranium enrichment work, the country's top national security official was quoted as saying yesterday.

"In a letter to the IAEA, we have announced this date," Ali Larijani was quoted as saying by the ISNA news agency in response to a question on when enrichment work would restart.

"Their inspectors will come to Iran for this purpose in the next few days," said Larijani, apparently referring to the procedure whereby agency seals are removed in the presence of IAEA inspectors.

Enrichment is a process that involves feeding uranium gas through cascades of centrifuges. When purified to low levels the result is reactor fuel, but the process can be extended to make the fissile core of a nuclear bomb.

Iran argues it only wants to generate atomic energy, and maintains that fuel cycle work for peaceful purposes is a right enshrined by the nuclear Non-Proliferation Treaty.

The hardline regime has ended its two-year-old freeze on enrichment in response to Saturday vote by the IAEA's 35-nation board of governors to report Iran to the UN Security Council.

When Iran agreed to the suspension in October 2003 as part of deal with Britain, France and Germany, the IAEA placed the concerned equipment -- mainly in an enrichment facility in Natanz -- under seal in order to verify that Iran was keeping its side of the bargain.

But Iran has always insisted the suspension was a voluntary and temporary measure, and in August resumed uranium conversion -- a precursor to enrichment -- and lab-scale enrichment on January 10 -- moves that prompted the present crisis.

The West has been urging Iran to accept a moratorium on fuel cycle work amid fears Iran's energy drive is merely a mask for a military programme.

"Those who planned the IAEA's board of governors meeting against Iran should pay for their behaviour," Larijani was also quoted as saying by the official IRNA news agency.

Iran is also blocking snap IAEA inspections of its nuclear facilities in response to the resolution.