Venezuela and Iran railed against Western imperialism Monday as Iranian President Mahmoud Ahmadinejad began a tour of Latin America amid mounting tensions over Tehran's suspect nuclear program.

As the Iranian leader met with firebrand Venezuelan President Hugo Chavez in Caracas, the UN's atomic energy watchdog confirmed that Iran had started enriching uranium at a new site in a difficult-to-bomb mountain bunker, in a move set to stoke Western suspicions that Tehran wants atomic weapons.

Iran also ratcheted up tensions with the United States by sentencing to death a US-Iranian man for allegedly spying for the CIA, a move quickly condemned by Washington.

Chavez and Ahmadinejad, who have strengthened ties in recent years and intensified their hostility towards Washington, greeted each other as "brothers" before a meeting to study bilateral deals.

"There's a desire for our governments to keep working together... to slow down the imperialist madness that has now been unleashed more than ever," Chavez said outside the Miraflores presidential palace.

"The Venezuelan and Iranian people are on the way to fighting all the greed and arrogance of imperialism," Ahmadinejad said.

The Iranian leader is under increasing pressure from the United States and the European Union to abandon his country's suspect nuclear program, which Tehran insists exists solely for peaceful purposes.

The United States said Monday that Iran's uranium enrichment work at a new site is a "further escalation" in the showdown.

Iranian political and military officials have meanwhile threatened to close the Strait of Hormuz, a major oil shipping lane, if threatened by military action or if Western sanctions halt oil exports.

In Latin America, Venezuela's relationship with Iran raises the deepest strategic concerns for the West, although Tehran has the strongest economic ties with Brazil, notably absent from Ahmadinejad's itinerary.

Observers wonder how much the leftist Chavez might undermine international sanctions against Iran by providing fuel or cash to the Islamic republic.

"It's possible that he'll share very radical and confrontational decisions with Ahmadinejad, but he could also suggest mediation, projecting a more conciliatory image, which would suit the leadership role he wants to take in Latin America," said Venezuelan analyst Elsa Cardozo, from the Metropolitan University of Caracas.

Ahmadinejad's arrival in Caracas Sunday came as Washington announced that the Venezuelan consul in Miami had been expelled.

Livia Acosta Noguera was accused in a documentary on Spanish-language channel Univision of links to a suspected Iranian cyber-plot against US nuclear facilities.

Venezuela and Iran, which both belong to OPEC, have economic ties worth around $5 billion as well as deals from building low-income homes to bicycles in Venezuela, most of which have yet to start.

Ahmadinejad, who is traveling with his foreign, economy and energy ministers, last visited Venezuela in November 2009.

He was due to travel Tuesday to Nicaragua to attend the inauguration ceremony for reelected President Daniel Ortega, before traveling to Cuba and Ecuador.

In Washington, State Department spokeswoman Victoria Nuland said the United States was "calling on all of these countries to do what they can to impress upon the Iranian regime that the course that it's on in its nuclear dialogue with the international community is the wrong one."

West alarm over Iran nuclear plant 'politically motivated'
Tehran (AFP) Jan 10, 2012 - Western expressions of alarm over uranium enrichment begun at a new underground plant in Iran are "politically motivated," the Iranian envoy to the UN nuclear watchdog said on Tuesday.

"These reactions are exaggerated and politically motivated and have been made over previous years," Ali Asghar Soltanieh was quoted as saying by the ISNA news agency.

He was commenting on Western reaction to the International Atomic Energy Agency's confirmation on Monday that Iran had begun enriching uranium to up to 20 percent level in its new Fordo plant -- a fortified bunker sunk into a mountain southwest of Tehran.

The United States said the activity was "a further escalation of their (the Iranians') ongoing violations with regard to their nuclear obligations," while Britain called it "provocative" and France said it was a "particularly grave violation by Iran of international law."

But Soltanieh said the installation at Fordo was revealed two years ago and documented.

He stressed that the IAEA had 24-hour cameras set up inside and visits by inspectors to monitor all nuclear activity.

Soltanieh renewed Tehran's insistence that the 20-percent uranium from Fordo would be used for "peaceful and humanitarian" purposes in a Tehran research reactor, that produces radioactive isotopes for cancer treatment.

Western critics note that the 20 percent threshold achieved by the centrifuges at the new plant is a significant advance towards the 90 percent plus level required for a warhead.

But Iranian officials have repeatedly denied any such ambition.

The Fordo row has stoked tensions already running high over Western moves to impose tough new sanctions targeting the Iranian economy and Iran's threats to retaliate by closing the Strait of Hormuz -- the strategic waterway at the entrance to the Gulf that is the world's most important chokepoint for oil tankers.

The United States and its chief Middle East ally, Israel, have both refused to rule out a resort to military action to prevent Iran developing a nuclear weapons capability.

Fordo, though, is a hardened underground fortress defended by anti-aircaft batteries.

"Israel, which has already warned Iran that it could take military action against installations, is very very worried by this facility ... We are moving into dangerous territory," said Mark Hibbs, of the Carnegie Endowment for International Peace.

Enriching uranium to weapons grade is one of three main requirements for a nuclear arsenal. The uranium also needs to be weaponised, that is converted into a warhead, and a delivery system needs to be developed that is capable of getting it to target.

A report published by the IAEA in November -- the watchdog's hardest-hitting to date -- pointed to evidence that Western governments said showed Iran had also been making efforts in the other two areas.

Tensions between Tehran and Washington have been further strained by a death sentence announced on Monday against an Iranian-American former Marine convicted of spying for the US Central Intelligence Agency.

The United States alleged last October that it had foiled an Iranian plot to assassinate the Saudi ambassador to Washington.

It has since twice ramped up sanctions on Iran's economy, including targeting the Iranian central bank, which is the key clearing house for oil export payments.

Iran for its part has paraded on television what it said was a sophisticated CIA drone. It has also warned the United States to keep one of its aircraft carriers out of the Gulf or risk the "full force" of the Iranian navy.