By Paul Reynolds
World Affairs correspondent, BBC News website
Iran's uranium conversion plant at Isfahan
Threats by Iran to re-start the process of enriching uranium could indicate that it has taken a strategic decision to develop a nuclear fuel production cycle.
If so, it could face UN sanctions in due course and one day even a military attack on its facilities by Israel or the United States.
But nuclear experts and a new assessment by US intelligence say that Iran is perhaps ten years from being able to make enough fuel for a nuclear bomb.
Iran is making its threats in the middle of negotiations with the so-called EU3 - Britain, France and Germany. A resumption of enrichment activity would bring those talks to an end and trigger a procedure to take Iran to the UN for possible sanctions.
"I think Iran is now serious about resuming enrichment eventually," said Gary Samore, until recently nuclear proliferation expert at the International Institute for Strategic Studies in London.
"Iran has probably concluded that the talks with the EU3 were a mistake. These talks will not produce an agreement."
Dr Samore says that Europeans are demanding an end to Iran's fuel cycle activities in exchange for assurances that Tehran would get fuel for its nuclear programme from Russia and trade benefits.
"Iran will not accept that. So I suspect that the main decision on enrichment has been taken and what we are seeing now is the tactical issue of how to bring the talks to an end," he added.
"The EU3 thought that Iran had agreed that its new government [which takes power on Wednesday] would be given the proposals but the old one bizarrely announced that the deadline was last Saturday. So maybe they are trying to squeeze as much as possible out of the Europeans."
Or maybe the new government has decided to take a clearer line and go ahead with enrichment.
Israel continues to say that Iran will be "past the point of no return" within six months if it resumes enrichment, as the Israeli Foreign Minister Silvan Shalom put it to correspondents in London recently.
By this, Israel appears to mean that by then Iran will have the technical ability to enrich fuel to the purity required for an atomic explosion.
Fuel for nuclear power is enriched to a lesser degree but the technology is basically the same.
However, Gary Samore thinks that Iran probably has that capability already. "It has enriched some fuel with a 164 cascade so it must be pretty close if not already there," he said.
"But what counts is the ability to do this on a big and sustained scale. That could take several years."
National Intelligence Estimate
According to the Washington Post, a new US National Intelligence Estimate judges that Iran will be unlikely to have enough highly enriched uranium before "early to mid-next decade."
The estimate reportedly does not express a view as to whether Iran would have the expertise to set off a nuclear explosion.
The Washington Post also says the estimate does not come to a conclusion either about whether Iran had decided to build a nuclear device.
However, it is possible that Iran has put that decision off until later. In the meantime, it can acquire the necessary fuel enrichment technology.
If talks fail
If Iran declares that the talks have failed and then resumes enrichment, it is likely that it will be reported to the Security Council by the UN's nuclear agency, the International Atomic Energy Agency.
Although Iran justifies fuel enrichment by saying this is allowed under the Nuclear Non-Proliferation Treaty and that the IAEA would monitor all activities, the IAEA says Iran has already broken the rules by hiding an enrichment programme over a period of 18 years.
That is the reason why it could be reported to the Security Council.
In the first instance, the council would probably urge Iran to halt enrichment on the grounds that its past illegal activity means that it cannot be trusted in the future.
In the second the council could issue a formal demand for the same. And in the third it could impose sanctions, such as a ban on technical assistance for Iran's nuclear power programme.
US President George Bush has said diplomacy is the chosen method of dealing with this, but that all other options are "on the table."