By Paul Reynolds
World Affairs Correspondent, BBC News website
Iran's decision to resume nuclear research after a voluntary suspension during the last two years is another step in the delicate and dangerous diplomatic dance over its nuclear future.
Iran says its nuclear programme is for purely peaceful purposes
It will be taken as a sign in the West that Iran is determined to pursue its ambition of developing the technology to enrich uranium - a technology that can be for both civil and military nuclear use.
Therefore, some response can be expected from Western governments, some of which might think that a red line has been crossed.
The EU3 - Britain, France and Germany - whose negotiations with Iran broke down last year will have to consider whether to give up on efforts to get those talks restarted.
The big question is whether an attempt will be made to get Iran referred to the Security Council for possible sanctions.
Iran is continuing what one British official called its "salami" tactics -- resuming this or that activity without going all out. This makes it difficult for Iran's critics to formulate a joint approach because they might disagree on when the moment for action has come.
In keeping with the two-steps forward, one-step back approach Iran has adopted, it is still proceeding with some caution.
As well as announcing this move on research, it has agreed to further talks with Russia next month on a compromise proposal from Moscow that enrichment of Iranian nuclear fuel be carried out in Russia - despite the breakdown of talks last week.
Iran's tactic is always to offer further talks even when, perhaps especially when, an impasse is reached.
It did so last year after the breakdown of negotiations with the EU3, which had been trying to turn a temporary suspension of Iranian enrichment work into a permanent cessation.
The head of the International Atomic Energy Agency (IAEA), Mohamed ElBaradei, has said that the world is "running out of patience with Iran". But he said that in December as well.
The German Foreign Minister Frank-Walter Steinmeier was more pointed and said: "This marks a breach of Tehran's commitments. It cannot remain without consequence. We have had over the past weekend two very, very ominous signals from the Iranian government." The other was the breakdown of talks with Russia.
Iran has so far managed to outwit its Western opponents but at some stage - if it goes on like this - the moment of decision might come.
Then the issue of whether the West could get enough support for a Security Council referral, from Russia and China especially, would be tested.
The IAEA agreed in principle last September that Iran should be reported to the council in view of its past, undeclared activities. But it has yet to do so in practice.
And even then the Security Council is likely to issue a warning first before moving to any sanctions, which would be mainly economic.
Not that Iran appears to be worried. The Supreme Leader Ayatollah Ali Khamenei said in a speech on 9 January that Iran would not be "frightened by threats".
He did add that he supported the concept of getting Western support for Iran's nuclear power plans, support which has been offered on condition that Iran does not develop the enrichment cycle itself. But he also said that Iran would not give up its nuclear rights.
The latest move can also be seen as part of the new militancy by the Iranian government under President Mahmoud Ahmadinejad. The president has already caused a shock by his denial that the Holocaust took place, and his call for Israel to be "wiped off the map".
The long-term prospects in this drawn-out crisis therefore remain dangerous. The United States and Israel are determined not to allow Iran to develop a nuclear bomb, something that Iran denies that it intends to do.
But the US and Israel might regard even the acquisition by Iran of enrichment technology as a step too far.