Iran announced on Sunday it would abandon limitations on enriching uranium, taking a further step back from commitments to a 2015 nuclear deal with six major powers, but it would continue to cooperate with the UN nuclear watchdog. 

International Atomic Energy Agency (IAEA) said in a statement on Monday that it will continue to closely monitor and verify Iran's nuclear activities, in response to Tehran's decision. 

"The IAEA will keep its member states informed of any developments in this regard in a timely manner as appropriate," IAEA said. 

Iran had been expected to announce its latest stance on the deal this weekend. But its announcement coincided with a major escalation of hostilities with Washington following the U.S. killing of top Iranian military commander Qasem Soleimani in a drone strike on Friday in Baghdad.

Read more:

World reacts to Soleimani's killing

U.S., Iran escalate war threats amid rocket attacks on U.S. embassy

State television said Iran would not respect any limits set down in the pact on the country's nuclear work: whether the limit on its number of uranium enrichment centrifuges to its enrichment capacity, the level to which uranium could be enriched, the amount of stockpiled enriched uranium or Iran's nuclear research and development activities. 

"Iran will continue its nuclear enrichment with no restrictions .... and based on its technical needs," a government statement cited by television said. 

Iran has steadily overstepped the deal's limits on its nuclear activities in response to the United States' withdrawal from the accord in 2018 and Washington's re-imposition of sanctions that have crippled Iran's oil trade.

Under the nuclear deal, Tehran agreed to curb its nuclear activities in exchange for the lifting of most international sanctions. 

Relations between Tehran and Washington sharply deteriorated after President Donald Trump's withdrew United States from the deal. While Iran has criticized European powers for failing to salvage the pact by shielding its economy from U.S. sanctions. 

Read more:

From coup to Soleimani's assassination: Seven decades of U.S.-Iran relations in pictures

Easing tensions between the U.S. and Iran

Sunday's statement said Tehran can quickly reverse its steps if U.S. sanctions are removed. 

"This step is within JCPOA (deal) & all 5 steps are reversible upon EFFECTIVE implementation of reciprocal obligations," tweeted Foreign Minister Mohammad Javad Zarif. 

Mark Fitzpatrick, associate fellow and nuclear non-proliferation expert at the International Institute for Strategic Studies, said Iran's latest step left room for diplomacy. 

"They are not saying how far they will push the enrichment or the number of centrifuges they'll operate," Fitzpatrick said. "I think they have reserved a lot of room for negotiation and for taking further steps if they need to."

'Maximum pressure' 

Washington said the "maximum pressure" campaign it started after withdrawing from the nuclear agreement would force Iran to negotiate a more sweeping deal, covering its ballistic missile program and its role in Middle Eastern conflicts. Iran said it wouldn't negotiate a new deal. 

Read more:

Rouhani: War with Iran is the mother of all wars

Graphics: Attitude gaps between U.S., Iran over nuclear deal

Tehran has rejected Western assertions that it has sought to develop nuclear weapons. 

Iran has already breached many of the deal's restrictions on its nuclear activities, including the purity to which it enriches uranium, its stock of enriched uranium, which models of centrifuge it enriches uranium with and where it enriches uranium. 

It has, however, not gone far over the purity allowed – the deal sets a limit of 3.67 percent – and Iran has stayed around 4.5 percent in recent months, well below the 20 percent it reached before the deal and the roughly 90 percent that is weapon-grade. 

The deal as a whole was designed to increase the time Iran would need to obtain enough fissile material for a nuclear bomb if it wanted one – the main obstacle to producing a nuclear weapon – from around two or three months. 

(Cover: Demonstrators hold placards depicting Iranian Major-General Qasem Soleimani during a protest outside U.S. Consulate in Istanbul, Turkey, January 5, 2020. /Reuters Photo)

(With input from Reuters)