The Islamic Republic News Agency (IRNA) reported that the fuel rod had "passed all physical and dimensional tests" and had been inserted into the core of Tehran's research reactor.
Iran had said it would be forced to manufacture the rods because it is barred from buying them on foreign markets. The tubes contain pellets of enriched uranium that provide fuel for nuclear reactors.
Tension has been growing between Iran and the West since a report by the United Nations nuclear inspection agency in November expressed serious concerns about a possible military dimension to the country's nuclear program.
The United States and its allies accuse Iran of trying to develop nuclear payloads for missiles. Tehran denies the charge, saying it needs the technology to generate electricity and produce radioisotopes to treat cancer patients.
On Saturday, President Obama signed a defense bill that includes new penalties against financial institutions that do business with Iran's central bank, an attempt to hamper Tehran's ability to fund the program. The head of Iran's Chamber of Commerce, Mohammad Nahavandian, dismissed Obama's action on Sunday.
"The Iranian nation and those involved in trade and economic activities will find other alternatives," Nahavandian was quoted as saying by the semi-official Iranian Students News Agency (ISNA).
The European Union is also considering additional measures that could include an embargo on Iranian oil imports, a vital source of hard currency for Tehran.
Iranian officials have threatened to retaliate by closing the Strait of Hormuz to oil tanker traffic, although they later appeared to back down by saying the country would not do so for now.
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