By Shahzeb Jillani
BBC News, Washington
The United States and Pakistan have disputed a recent report by a nuclear monitoring institute which says that Pakistan is building a new reactor.
Pakistan already has nuclear-tipped missiles
Last month, the US-based Institute for Science and International Security (Isis) published satellite images of the Khushab nuclear site.
The report said that it could produce enough plutonium to make 40 to 50 nuclear weapons a year.
The report sparked worldwide concerns, but both US and Pakistan downplayed it.
The US said the administration was aware of the developments at the nuclear complex.
And Pakistan's foreign ministry refused to comment on the charges, saying the Khushab nuclear site was well known.
But now for the first time the two governments have spoken out against the report.
Last week, The New York Times quoted the US National Security Council spokesman, Frederick Jones, as saying that Isis analysis was wrong.
"After assessing the Isis findings, the US government experts believe that the reactor is expected to be substantially smaller and less capable than reported," he said.
A day later, the US State Department spokesman, Edgar Matthews, said "the reactor will be over ten times less capable" than estimated.
Pakistan's ambassador to Washington, Mahmud Ali Durrani, also dismissed the report saying the Isis analysis was "grossly exaggerated".
In an interview to The Washington Times, he acknowledged for the first time that the plutonium from the reactor could be used for civilian or military purposes. But, "it's simply not true that it will increase our capability X-fold", the newspaper quoted him as saying.
The institute says it stands by its findings.
In a fresh statement released on the Isis website the authors of the report, David Albright and Paul Brannan, said they remain convinced that the new reactor is capable of providing Pakistan plutonium "many times greater than its current annual output".
The expert opinion on the accuracy of the report and Pakistan's nuclear capability is divided.
Michael Krepon, South Asia security analyst and President Emeritus of the Henry L Stimson Center, says he finds the Isis claim "surprisingly high".
He is sceptical that anybody on the outside could claim to know more about a country's alleged nuclear activity than the many experts with direct access to sensitive classified information working for the government.
But Leonard Weiss, a prominent non-proliferation expert and former US senate staff member who helped author many US non-proliferation laws, told the BBC he is not surprised "that Pakistan may be picking up the pace on increasing its nuclear arsenal".
Isis is a well-known and highly regarded organisation within academic circles, specialising in nuclear proliferation.
The organisation - and the authors of the report - tend to be inclined against any form of proliferation around the world.
The Isis report said that the construction of the reactor at Khushab could bring about a dramatic increase in the size of the Pakistani and Indian nuclear arsenals.
"The reactor under construction... could produce over 200kg of weapons-grade plutonium per year, assuming it operates at full power for a modest 220 days per year.
"At four to five kilograms of plutonium per weapon, this stock would allow the production of 40-50 weapons a year," the report said.
Isis published commercially available satellite photos which its analysts said appeared to show the plant under construction.
The Washington-based organisation said that work apparently began some time after March 2000, but "work does not appear to be moving quickly".
The report's authors said this could be because Islamabad is facing a shortage of reactor components or does not have the necessary weapons production infrastructure.
Experts believe that the timing of the release of the report is significant, because it raises fresh concerns about an arms race in South Asia at a time when the US is on the verge of ratifying a deal which would give India greater access to American civilian nuclear technology.