Iran vowed to ramp up its uranium enrichment to close to weapons grade in retaliation for an attack on one of its leading atomic facilities, sending a jolt through big power talks on containing the Islamic Republic’s nuclear work due to resume later this week.

Tehran said it will for the first time begin producing highly enriched uranium — purified to 60% from current levels of 20% — from Wednesday in response to the sabotage of its Natanz nuclear site at the weekend, which it has blamed on Israel and called an act of “nuclear terrorism”...