Iran has threatened to resume higher enrichment of uranium in 60 days if world powers fail to negotiate new terms for its 2015 nuclear deal.
It comes a year after President Donald Trump withdrew from the accord, raising tensions as a US aircraft carrier and a bomber wing deploy to confront unspecified threats from Tehran.
In a televised address, President Hassan Rouhani also said Iran would stop exporting excess uranium and heavy water from its nuclear programme, two requirements of the deal.
He did not elaborate on the degree to which Tehran was prepared to enrich uranium, which at high levels of enrichment can be used in nuclear weapons.
Mr Rouhani said Iran wanted to negotiate new terms with remaining partners in the deal, but acknowledged that the situation was dire.
"We felt that the nuclear deal needs surgery and the painkiller pills of the last year have been ineffective," Mr Rouhani said.
"This surgery is for saving the deal, not destroying it."
The 2015 agreement lifted sanctions on Iran in exchange for limits on its nuclear programme. After the US withdrew from the accord it restored crippling sanctions on Iran, exacerbating a severe economic crisis.
Iran notified the UK, Russia, China, the EU, France and Germany of its decision. All were signatories to the nuclear deal and continue to support it.
Foreign minister Mohammad Javad Zarif, who met his Russian counterpart in Moscow, said: "If the five countries join negotiations and help Iran to reach its benefits in the field of oil and banking, Iran will return to its commitments according to the nuclear deal."
However, he warned of a "strong reaction" if European leaders instead sought to impose more sanctions on Iran through the UN Security Council.
Mr Zarif issued a warning from Moscow, tweeting: "After a year of patience, Iran stops measures that US has made impossible to continue," adding that world powers have "a narrowing window to reverse this".
Mr Rouhani also said that if the 60 days pass without action, Iran will halt a Chinese-led effort to redesign its Arak heavy water nuclear reactor. Such reactors produce plutonium that can be used in nuclear weapons.
There was no immediate response from the US.
The White House said on Sunday that it would dispatch an aircraft carrier and a bomber wing to the Persian Gulf over what it described as a new threat from Iran.
Tehran reached the deal with world powers in 2015 after years of negotiations, including secret talks with Barack Obama's administration in Oman. Western governments had long feared Iran's atomic programme could allow it to build nuclear weapons. Tehran has always maintained its programme is for peaceful purposes.
That Iran choose to keep its excess uranium and heavy water first, rather than abandon the accord in its entirety, shows it still hopes to secure a deal.
Under the 2015 deal, Iran can keep a stockpile of no more than 300kg of low-enriched uranium, compared with the 10,000kg of higher-enriched uranium it once had.
The US last week ended deals allowing Iran to exchange its enriched uranium for unrefined yellowcake uranium with Russia, and to sell its heavy water, which is used as a coolant in nuclear reactors, to Oman.
The US has also ended waivers for countries buying Iranian crude oil, a key source of revenue for Iran's government.
Currently, the accord limits Iran to enriching uranium to 3.67 per cent, which can fuel a commercial nuclear power plant. Weapons-grade uranium needs to be enriched to around 90 per cent. However, once a country enriches uranium to around 20 per cent, scientists say the time needed to reach 90 per cent is halved. Iran has previously enriched to 20 per cent.
