The issue has long been at the centre of disputes with Western powers, especially the United States, which accuse Tehran of seeking a nuclear weapon -- a claim Khamenei again denied.
Below are key questions:
- Why insist on enrichment? -
Iran's nuclear sector employs more than 17,000 people, according to Atomic Energy Organization of Iran spokesman Behrouz Kamalvandi.
He says nuclear energy is used for electricity as well as health, agriculture and advanced technologies.
Khamenei said enriched materials support sectors including Iran's strained power grid during rare summer heatwaves.
Civilian nuclear plants use uranium enriched to between three and five percent, while Tehran's research reactor requires up to 20 percent, according to Iranian media.
Enrichment rose to 60 percent after Donald Trump withdrew from the 2015 nuclear deal and reimposed sanctions on Iran during his first term as US president in 2018.
Iran insists the enrichment programme has no military ambitions, though 60 percent is just short of the 90 percent weapons threshold.
The UN's nuclear watchdog, the International Atomic Energy Agency (IAEA), says Iran is the only non-nuclear weapon state to enrich uranium to such levels.
Tehran says it has paid a high price for its enrichment activities including assassinations of scientists and sabotage of facilities in attacks mostly blamed on Israel.
In June, Israel attacked Iran, and was later joined by the United States in strikes on nuclear sites.
- Why is it non-negotiable? -
Washington now demands Tehran renounce enrichment -- a US red line.
The 2015 accord capped Iran's enrichment at 3.67 percent in exchange for sanctions relief over a 10-year period ending in October.
Khamenei said Iran had "carried out all the obligations we were supposed to do" but "none of the promises they made were fulfilled".
He argues giving up enrichment would put the Islamic republic in an even weaker position than under the 2015 deal, which already faced opposition from hardliners.
Tehran also considers civilian nuclear energy -- including uranium enrichment -- a right under the Nuclear Non-Proliferation Treaty (NPT), of which it is a member.
- When did it start? -
Iran's nuclear programme dates back to the 1950s under the US-backed shah, Mohammad Reza Pahlavi, who signed a civilian nuclear cooperation deal with Washington in 1957.
Tehran ratified the NPT in 1970, placing nuclear material under IAEA oversight.
In 1974, the shah launched an ambitious plan to build at least 20 power plants to meet rising domestic energy needs and offset finite oil reserves.
Construction began in Bushehr with German firm Siemens but was halted after the 1979 Islamic Revolution and the 1980-88 Iran-Iraq war.
- Why suspicion? -
In 2002, satellite images aired by US broadcasters revealed two undeclared sites near Arak and Natanz.
The following year, the United Nations found traces of enriched uranium at Natanz, one of Iran's main facilities targeted by the United States when it joined Israel in attacking Iran this year.
Western powers, led by the United States and joined by Israel, accuse Iran of seeking nuclear weapons, a charge it denies, sparking a prolonged standoff.
Iran began enrichment to 3.5 percent in 2006, later raising it to 4.8 percent. The United Nations imposed its first sanctions that December.
By 2009, enrichment reached 20 percent. Tensions eased in 2015 with a landmark nuclear deal between Iran and major powers.
But with the United States' withdrawal, renewed sanctions and Iran's move to enrich uranium to 60 percent, the dispute is back at the forefront of international attention, with potential sanctions looming.
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