A US intelligence assessment predicted that Iran would increase uranium enrichment to 60 per cent purity in the event of a setback in nuclear talks, such as the absence of sanctions relief.
The 27-page report by the Office of the Director of National Intelligence examines threats the US faces around the world.
It warned such a move by Iran would bring it a step closer to the 90 per cent threshold needed for uranium to be used in a nuclear weapon.
"If Tehran does not receive sanctions relief, Iranian officials probably will consider options ranging from further enriching uranium up to 60 percent to designing and building a new 40 megawatt heavy water reactor," the report said.
The report's authors added that Iran may not yet be taking follow on steps that would lead to a deployable nuclear weapon.
"We continue to assess that Iran is not currently undertaking the key nuclear weapons-development activities that we judge would be necessary to produce a nuclear device."
Iran's announcement Tuesday came two days after an explosion at its key nuclear facility in Natanz, which it blamed on arch-enemy Israel.
The 2015 nuclear agreement among Iran and major world powers calls for Iran to modify its heavy water reactor in Arak, which is under international control, so that it cannot produce military-grade plutonium.
North Korea nuclear tests
North Korea could resume nuclear tests this year as a way to force President Joe Biden's administration to enter into dialogue, the report also warns.
"North Korean leader Kim Jong Un may take a number of aggressive and potentially destabilising actions to reshape the regional security environment and drive wedges between the United States and its allies – up to and including the resumption of nuclear weapons and intercontinental ballistic missile (ICBM) testing," it said.
"We assess that Kim views nuclear weapons as the ultimate deterrent against foreign intervention and believes that over time he will gain international acceptance and respect as a nuclear power," the report states.
North Korea has not tested a long-range missile in more than three years, and has left the door open to talks with the US on denuclearising the Korean peninsula.
But the report said "Kim may be considering whether to resume long-range missile or nuclear testing this year to try to force the United States to deal with him on Pyongyang's terms."
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Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
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Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
BULKWHIZ PROFILE
Date started: February 2017
Founders: Amira Rashad (CEO), Yusuf Saber (CTO), Mahmoud Sayedahmed (adviser), Reda Bouraoui (adviser)
Based: Dubai, UAE
Sector: E-commerce
Size: 50 employees
Funding: approximately $6m
Investors: Beco Capital, Enabling Future and Wain in the UAE; China's MSA Capital; 500 Startups; Faith Capital and Savour Ventures in Kuwait
UAE currency: the story behind the money in your pockets
The biog
Favourite food: Fish and seafood
Favourite hobby: Socialising with friends
Favourite quote: You only get out what you put in!
Favourite country to visit: Italy
Favourite film: Lock Stock and Two Smoking Barrels.
Family: We all have one!