A report by the United Nations' nuclear watchdog says that Iran has dramatically accelerated its production of enriched uranium will stoke already high tensions over Tehran's atomic ambitions.
Intelligence agencies in the United States do not believe Iran is trying to build a nuclear bomb, leading US newspapers have reported. But they suspect Tehran wants to ensure it has atomic weapons capability.
Even so, it would take Iran two to three years to develop a deliverable bomb and any attempt to "break out" would soon be detected, most analysts say.
That allows a window for a diplomatic solution to the growing crisis which has seen the West slap Tehran with unprecedented sanctions and Israel talk publicly about a military strike against Iran's nuclear facilities.
Tehran has responded with threats to close the Strait of Hormuz, the jugular vein of global oil exports. The US, in turn, plans to beef up its already significant military presence in the waterway, the Wall Street Journal reported yesterday.
Iran insists its nuclear programme is solely for civilian purposes and its supreme leader, Ayatollah Ali Khamenei, declared last week nuclear weapons were a "sin".
But the International Atomic Energy Agency (IAEA) reported on Friday it "continues to have serious concerns regarding possible military dimensions to Iran's nuclear programme".
The UN body said Iran has stepped up uranium enrichment, denied its inspectors access to a military testing site near Tehran and had not answered questions about charges of weapons-related work.
At the same time, the IAEA confirmed there was no diversion of nuclear material from Iran's 15 declared nuclear facilities which it monitors.
The IAEA report also found Iran had overstated its claims of nuclear prowess, particularly in relation to its uranium enrichment site at Fordow.
This is a virtually impregnable underground facility near Qom whose existence was revealed by Western intelligence agencies in 2009.
"There's been a lot of hysterical talk that Ferdow was going to be stuffed full of the most advanced centrifuges capable of producing weapons-grade uranium with terrifying efficiency," said Peter Jenkins, a British former ambassador to the IAEA.
"But we learn from this report that the Iranians are installing the most primitive centrifuges there," he said in an interview.
The impact of the IAEA report will be diluted if there are successful new nuclear negotiations between the Iran and the US, Russia, China, Britain, France and Germany, analysts said.
"But if the talks fail, the report will become yet more ammunition for those who want to impose even tougher sanctions against Iran and isolate it," Meir Javedanfar, an Iranian-born analyst in Israel, said in an interview.
Iran this month belatedly accepted an invitation to new talks issued by the world powers in October, apparently without setting any preconditions.
The initial response from Washington and Brussels was positive.
Tehran may have boosted its uranium enrichment to strengthen its negotiating hand.
US intelligence officials and other analysts believe there is also another possible explanation for Iran's enrichment activity, the New York Times reported yesterday.
They say Tehran could be seeking to enhance its regional influence by creating "nuclear ambiguity".
Rather than building a bomb now, Iran may want to increase its power by sowing doubt among other nations about its nuclear ambitions.
mtheoudoulou@thenational.ae