Delivering Iran's first reply to the chorus of protests, Rafsanjani, who heads the powerful Expediency Council, said he was "astonished" by the West's attempt to "bully" Iran.
In London, Prime Minister Tony Blair indicated Britain would push for the U.N. nuclear body, the International Atomic Energy Agency, to refer Iran to the U.N. Security Council, which could impose sanctions.
"I think the first thing to do is to secure agreement for a reference to the Security Council, if that is indeed what the allies jointly decide, as I think seems likely," Blair told parliament.
White House press secretary Scott McClellan said Tuesday that Iran's course left "no other choice but to refer the matter to the Security Council."
Asked about sanctions, Blair said: "We obviously don't rule out any measures at all."
In Moscow, the Foreign Ministry said Russian Foreign Minister Sergey Lavrov had discussed the issue with U.S. Secretary of State Condoleezza Rice and both sides shared "a deep disappointment" over Iran's move.
France, Germany and Britain are due to meet at ministerial level Thursday to discuss their response to Iran. The three nations have been negotiating with Tehran for two years in a bid to ensure its nuclear program is peaceful.
"I don't know what the three foreign ministers will decide tomorrow, but I believe they cannot continue to negotiate without an Iranian assurance that there will be no concrete enrichment activity," said German Deputy Foreign Minister Gernot Erler.
The three European powers had been scheduled to resume talks with Iran on Jan. 18.
However, Erler was cautious about referring Iran to the Security Council, saying it could lead to the "threat of sanctions, and that can lead to an escalation that can get out of control."
it had broken IAEA seals at its Natanz uranium enrichment plant and resumed research. While Iranian officials stressed the work would not involve enrichment, the IAEA said in a statement that Iran planned to carry out small-scale enrichment.
The West has long opposed Iran's performing enrichment as it can produce material suitable for atomic weapons. Iran insists it is only interested in uranium enriched to lower levels, which is used in nuclear reactors that generate electricity.
Iran claims its nuclear program is confined to electricity production, but Washington accuses it of seeking nuclear weapons.
In a speech to mark the imminent end of the Islamic pilgrimage to Mecca, Rafsanjani accused the West of trying to limit the progress of the developing world.
"Keeping the Third World and the Islamic world several steps behind has been the West's traditional colonial policy," he said in remarks broadcast live on state television.
"Even if (the Westerners) destroy our scientists, their successors would continue the job," he said. "It would not be easy for them to solve the (nuclear) case by imposing sanctions or anything like that."
Warning the West against trying to curb Iran, he said: "If they cause any disturbance, they will ultimately regret it."
Rafsanjani, who was president of Iran in the 1990s, was theto the hard-line President Mahmoud Ahmadinejad in the run-off elections last June.
In Rome, Italian Foreign Minister Gianfranco Fini said Wednesday the world had entered a "new phase" in relations with Iran and it would know "how to find the most effective ways to deal with this." He did not mention specific measures, but last year he said Iran should be referred to the U.N. Security Council.
On Tuesday, French President Jacques Chirac warned Iran it would commit a serious mistake if it ignored the international community. And Japan said Iran's move was "a matter of deep regret."