The Group of Seven Nations called on Iran on Friday to "cease and reverse" nuclear escalation as well as the ongoing enrichment of uranium without any plausible civilian rationale.
According to a draft communiqué, the leaders stated that they would be prepared to implement additional steps in the event that Tehran transferred ballistic missiles to Russia.
During the two days of the summit, which began on Thursday at the opulent southern Italian resort of Borgno Egnazia, the Middle East has been a major topic of conversation.
Along with stepping up support for Ukraine, leaders have expressed alarm over escalations on the border between Lebanon and Israel and welcomed US President Joe Biden's offer for a truce in Gaza.
The United States, Canada, France, Germany, Italy, and Japan make up the G7. Pope Francis and a number of other world leaders have been invited to discuss artificial intelligence on Friday afternoon.
It is anticipated that a farewell statement will be released on Friday night.
A day after the International Atomic Energy Agency reported that Tehran is increasing its nuclear capabilities, the G7 expressed worries about Iran. Last week, the board of governors of the IAEA approved a resolution denouncing Tehran for not collaborating with the UN nuclear watchdog.
Tehran notified the IAEA that it was adding more cascades to the enrichment facilities at Fordow and Natanz; the agency's members were informed.
A cascade is an arrangement of centrifuges, which are devices used in the uranium enrichment process. This development was considered "moderate" by a diplomatic source.
Iran has been enriching uranium up to 2% purity in those cascades thus far. It already enriches uranium to a maximum of 60%, which is just a little technological step below the 90% weapons grade.
Tehran did not accept the verdict right away. But it comes after Iran vowed to respond after the IAEA board of governors voted earlier this month to reprimand the nation for not cooperating properly with the organisation.
US State Department spokesperson Matthew Miller criticised the decision right away.
Mr. Miller did not go into detail about possible actions that the US and its allies may take. But Washington and other countries have already imposed harsh economic sanctions on Iran, which have severely damaged its economy and caused the value of the rial to plummet in recent years.
The Islamic Republic has progressively distanced itself from the terms of the 2015 nuclear agreement it signed with international powers.
In exchange for Iran reducing its atomic programme and receiving respite from western sanctions, the historic agreement broke down in 2018, with the US withdrawing unilaterally, led by then-President Donald Trump.