By Roxana Saberi
BBC News, Tehran
Tehran insists that its nuclear work is peaceful
Iran's announcement this week that it had made nuclear fuel, followed by the inconclusive visit to Tehran by the chief of the UN's nuclear watchdog, has left observers wondering what Iran will do next.
In general, they believe Iran will now follow one of two paths: either it will take a tougher stance on its nuclear programme, or it will become more willing to compromise.
Statements made by many Iranian lawmakers and officials since Tuesday's announcement seem to support the first view.
Iran's top nuclear negotiator has said the UN Security Council's call for Iran to return to a freeze on its uranium enrichment work "was not very important".
And Hamidreza Babaei, a member of the National Security and Foreign Affairs Commission in Iran's parliament, said Iran would not re-suspend its uranium enrichment work.
"Suspension doesn't have a meaning in our opinion," he said. "Suspension means regression."
Tehran says it wants to enrich uranium to a low level to power nuclear reactors and not to a high level, which would be needed to develop nuclear weapons.
Iran has said it enriched uranium to 3.5% as part of its pilot enrichment programme.
Mohamed ElBaradei, the director of the International Atomic Energy Agency (IAEA), said after talks with Iranian officials on Thursday that his agency was studying samples to confirm Iran's announcement.
But while many Iranian leaders have sounded defiant, some observers believe Iran may be more prepared to suspend its industrial-scale uranium enrichment programme now that it has announced it has the ability to make nuclear fuel.
"On the one hand Iran can persuade [domestic] public opinion that it has gained nuclear technology," said Rahman Ghahremanpour, a political analyst in Tehran.
"On the other hand, the world knows Iran's capability is not too dangerous, and it's in the low-scale and not high-scale enrichment.
"Because of this I think we may see a turning point in solving the Iranian problem," he said.
"Iran may accept a [temporary] halt of its work toward industrial-level enrichment and accept having a limited pilot enrichment programme."
Mr Babaei, however, dismissed this theory.
Mr ElBaradei's IAEA is checking Iranian enrichment samples
"The Islamic Republic is neither trying to brag to the world nor is it trying to deal politically with its people and say, 'well, we arrived at this point so now we'll suspend [uranium enrichment work]'," he said.
"Iran is pursuing the third path, which is what both our people and our leaders want.
"We want, without creating tensions or threats, to defend our national interest - which is to have the nuclear fuel cycle in our country for production of fuel for our reactors."
Aliasghar Soltanieh, Iran's ambassador to the IAEA in Vienna, has said his country offered in March to temporarily suspend large-scale enrichment, but that the proposal was rebuffed.
"We were able to [offer a] compromise to suspend large-scale enrichment and discuss ways and means to assure there won't be any ambiguities left and that this will be for peaceful purposes," he said in a telephone interview late last month.
"We gave a generous offer that gave a lot of compromise, provided this issue was not sent to the UN Security Council - but this historical opportunity was not taken into consideration by our European colleagues."
When asked if Iran would consider making the same offer again, he replied: "To the best of my knowledge, it won't be possible."
But some observers and Western diplomats say even if Iran were now to agree to temporarily suspend its plans for industrial-scale uranium enrichment, the country would never agree to demands to halt all enrichment work.
And Iranian leaders may have concluded that any compromise would need to be reached through a dialogue with the US, according to analyst Mr Ghahremanpour.
"Iranian power elites have accepted that any confrontation between Iran and the US is not beneficial for Iran," he said.
"They probably believe the future way will be determined by US-Iran negotiations, and they hope they can solve the problems with negotiations with the US."
A compromise over Iran's nuclear programme would also depend on the response from Washington.
Some observers believe while certain players in the Bush administration want to reach a nuclear deal with Tehran, others welcome Iran's tough stance as a justification for pursuing regime change.