Iran is holding nationwide rallies on Thursday, as the country celebrates the 31st anniversary of the Islamic Revolution.

President Mahmoud Ahmedinejad has addressed a rally of thousands of pro-government Iranians in Azadi Square in the capital, Tehran. In his speech, he has announced that Iran was now "a nuclear state".

"The first package of 20% enriched uranium fuel was produced and provided to the scientists," he said, adding that the country now had the capability of 80% enrichment of the nuclear fuel, and that scientists would soon be able to treble output.

There have been unconfirmed reports of anti-government protests, and of clashes with police. A media correspondent based in Tehran has said that both government and opposition have chosen to make this anniversary a "trial of strength".

The President also said that Western countries were hampering genuine reform in Iran. "It's been 31 years that they have been opposing the Islamic revolution, and also they have been hampering the progress of this great nation," he said.

Earlier this week Iran had announced its decision to further enrich uranium for its nuclear programme. This prompted the US to extend sanctions, targeting members of the elite Revolutionary Guard.

Tehran says its nuclear programme is for civilian purposes, but the West suspects it of trying to develop nuclear weapons.