IRAN: What is not clear is whether the Islamic republic's leaders have taken the political decision to produce weapons, writes Lara Marlowe
Revolutionary Iran inherited a nuclear power programme from the Shah. Given that he had signed the nuclear Non-Proliferation Treaty and was a close ally of Washington, no one worried.
Iran holds substantial natural uranium deposits, and throughout the 1990s there were suspicions - later confirmed - that it was attempting to master the nuclear fuel cycle by producing enriched uranium.
As a signatory of the NPT, Iran has the legal right to enrich uranium for its civil programme, providing it notifies the International Atomic Energy Agency in Vienna of each step, and accepts inspections. But Iran hid its enrichment programme for 18 years, and mastery of the fuel cycle would put it within reach of nuclear weapons.
On behalf of the EU, the foreign ministers of Britain, France and Germany concluded their second agreement with Tehran last November. Iran has suspended its enrichment programme in exchange for the promise of European co-operation in its nuclear power programme, plus economic, technological and political support.
The US was unhappy about the EU-Iran accord. "Whatever happens, we're convinced that Iran will break the agreement sooner or later," an official told the Washington Post.
The EU believes its carrot-and-stick approach can persuade Iran to permanently renounce its legal right to complete the nuclear fuel cycle. Six months before a presidential election, Tehran has made it a question of national independence and insists that the suspension is temporary.
Dr Mohamed ElBaradei, the head of the IAEA, stresses that the right to enrich uranium or process plutonium should be re-examined, and has made proposals to this effect.
"There are a number of countries that have these capabilities that could be considered nuclear powers, but haven't been regarded as such so far," said Melissa Fleming, the spokeswoman for the IAEA.
"Once you achieve that, you've come quite close to being able to make nuclear weapons."
In August 2002 the Mujaheddin Khalq, an exiled Iranian opposition group, revealed the existence of a huge enrichment plant at Natanz, 250km south of Tehran, and of plans for a heavy water plant at Arak.
Six months later, Dr ElBaradei obtained the right to visit the installations. IAEA inspectors were shocked by the size of the underground installations, which were large enough to hold hundreds of centrifuges.
High-speed centrifuges are used to purify and concentrate uranium. Five per cent uranium is used to produce electrical power; beyond 80 per cent, it can make nuclear warheads.
IAEA inspections have uncovered a wealth of detail about the Iranian programme over the past two years. But the Iranians have still not explained why inspectors found particles of enriched uranium at several sites, as well as plans for very powerful centrifuges which would seem to have no place in a civil nuclear programme.
Iranian co-operation with the IAEA was "quite mixed" at the beginning, Ms Fleming says. "There was a lot of not telling the whole story, then when the IAEA found things, changing the story."
In November, Dr ElBaradei announced that the IAEA had sealed hundreds of centrifuges, and placed 20 units under permanent video surveillance.
Most experts, Le Monde reports, believe Iran could master the nuclear fuel cycle this year, which would give it the ability to build a nuclear weapon by the end of the decade. What is not clear is whether Iran's leaders have taken the political decision to make nuclear weapons, or whether they merely want to have the pieces of the puzzle on hand should they decide to do so.
The disagreement between Washington and Europe and the IAEA is not unlike that which preceded the Iraq war; except that in Iran's case, there is solid evidence of cheating. But Europe and the IAEA believe that continued inspections, combined with incentives to Iran to give up the fuel cycle, are the safest way to dissuade the Iranians.
If Israel staged a pre-emptive strike on Iranian installations, there is little Iran could do to retaliate militarily; its Shehab missiles do not have the range to reach Israel. Instead, Tehran could stir anger against the US and Israel among Iraq's Shia Muslim majority and the Hizbullah of Lebanon - with potentially catastrophic consequences.