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CBS News, Chris Usher, Associated Press
This Jan. 6, 2012, image released by CBS News Sunday, Jan. 8, 2012, shows Chairman of the Joint Chiefs of Staff, Gen. Martin Dempsey, left, and U.S. Secretary of Defense Leon Panetta, speaking on CBS's "Face the Nation" in Washington. Panetta and Dempsey discusses the impact of the new defense strategy on U.S. foreign policy.

VIENNA — Diplomats have confirmed reports that Iran has begun uranium enrichment at a new underground bunker and say the process is producing material that can be upgraded quickly for use in a nuclear weapon.

Two diplomats tell The Associated Press that centrifuges at the Fordo, Iran, site are churning out 20 percent uranium. That's higher than the 3.5 percent being made at Iran's main enrichment plant and can be turned more easily into fissile warhead material.

The diplomats said Monday that 348 machines are operating at Fordo. They based their information on an inspection last week by the International Atomic Energy Agency.

They asked for anonymity because their information is confidential.