Iran has failed to comply with a UN deadline for it to suspend its uranium enrichment programme in exchange for incentives. The Security Council is to consider possible sanctions.
Western powers are concerned because, while enriched uranium is used as fuel for nuclear reactors, highly enriched uranium can also be used to make nuclear bombs.
Iran says it is simply doing what it is entitled to do under the nuclear Non-Proliferation Treaty (NPT). It argues it needs nuclear power and insists its intentions are peaceful.
What is uranium enrichment?
Naturally-occurring uranium has two isotopes, U-235 and U-238. The first, U-235, is known as a "fissile isotope" because of its propensity to split in a chain reaction.
This process releases heat, which is harnessed in a nuclear reactor and used to generate electricity.
For uranium to work in a nuclear reactor it must be enriched to increase the proportion of fissile U-235 from 0.7% to 2-3%. Weapons-grade uranium must contain 90% or more U-235.
Two main technologies are used: gaseous diffusion and centrifuge enrichment.
Both function by exploiting difference in mass to separate the U-235 and slightly denser U-238 isotopes.
The technology needed to enrich uranium to make fuel for nuclear reactors is the same as that needed to enrich uranium for nuclear weapons.
Who is already enriching uranium?
According to the UN's nuclear watchdog, the International Atomic Energy Agency, six organisations operate commercial-scale enrichment plants.
- China National Nuclear Corporation (CNNC), which has two centrifuge plants in China
- Eurodif, a joint venture between Belgium, France, Italy and Spain, with one diffusion plant in France
- Minatom, the Russian state organisation, with four centrifuge plants
- Japan Nuclear Fuel Limited (JNFL), with one centrifuge plant
- Urenco, a joint venture between companies in Germany, the Netherlands and the UK, with centrifuge plants in each of the three countries
- The United States Enrichment Corporation (USEC), a US firm with a diffusion plant in Kentucky
Both Pakistan and India enrich uranium on a smaller scale. Argentina's enrichment programme is said by experts to be more or less dormant.
Following lengthy negotiations with the IAEA, Brazil opened a new centrifuge facility at its Resende nuclear plant in May 2006.
Iran announced in April this year it had joined the "nuclear club" by successfully enriching uranium for use as nuclear fuel.
Experts say Israel is suspected of running a uranium enrichment programme at its Dimona complex but this has not been confirmed.
North Korea is also thought to be enriching uranium, using centrifuges, but again no details are known.
What controls are there on uranium enrichment?
Nations which are signatories to the nuclear Non-Proliferation Treaty have the "inalienable right" to make nuclear fuel for peaceful purposes, through enriching uranium or separating plutonium.
This must be done under a safeguards agreement with the IAEA, under which all nuclear material is subject to routine inspection.
However, there are three states - India, Israel and Pakistan - which are known to possess nuclear weapons but have never joined the treaty.
North Korea withdrew from the treaty in 2003. Multilateral talks aimed at persuading it to give up its nuclear ambitions are currently deadlocked.
So why is Iran under pressure to suspend enrichment activities?
Western powers fear that Iran secretly wants to develop either a nuclear bomb or the ability to make one.
Jeffrey Lewis, executive director of the Managing the Atom Project at Harvard University, says their suspicion is largely based on Tehran's track record.
Iran denies claims that it wants to build nuclear weapons
Iran's action in hiding a uranium enrichment programme for 18 years - its existence was only confirmed by the IAEA in 2003 - meant it had violated the trust placed in it under the NPT.
"The Iranians have failed to provide information about their nuclear activities as required under their safeguards agreement," he says.
"As a consequence, there is some considerable scepticism about their intentions. We expect states to abide by their international agreements."
By contrast, Brazil made no secret of its intention to enrich uranium and negotiate a safeguards regime, Mr Lewis says.
Fellow nations are more confident of Brazil's stability than that of Iran, he adds, and have greater trust in its assurances that it is not seeking nuclear weapons.
Do countries need to enrich uranium to run a nuclear power programme?
No - all the enriched uranium needed for use in civilian activities can be imported from the commercial-scale facilities on the open market.
As long as a country plays by the rules, Mr Lewis says, it should have no reason to fear its supply will be cut off.
From an economic point of view, it is hugely expensive and takes time to develop nuclear enrichment technology. Organisations such as Urenco have such a head-start that it would be very difficult for a country to develop a programme to compete on a cost basis.
Iran says it needs to enrich uranium itself because it wants to control the whole process for generating nuclear power.
How difficult is uranium enrichment?
Iran says it is a matter of national pride that its scientists master nuclear enrichment.
Iran says it needs enrichment as part of national scientific progress
But, says Mr Lewis, the argument that the research would advance Iran's scientific progress is undermined by the fact the technology involved is "about as old as a refrigerator".
David Albright, president of the US-based Institute for Science and International Security (ISIS), says the difficulty comes in manufacturing the parts to a high enough quality and putting the centrifuges together to operate in cascades.
It typically took advanced Western nations more than a decade to develop the technology, he points out, with the first semi-commercial plant coming online in the 1970s.
Some countries have accelerated the development of their nuclear programmes by acquiring technology and expertise on the black market, he adds.
Are any other countries considering uranium enrichment?
Argentina has announced a US$3.5bn investment to restart its nuclear programme.
It plans to finish construction of its third nuclear power plant and begin building a fourth. It will also resume uranium enrichment - a process it halted during the 1980s under strong international pressure.
Australia has recently begun investigating the possibility of enriching uranium commercially and developing domestic nuclear power.
The country, which holds 40% of the world's known uranium reserves, sells uranium only to members of the NPT and insists they sign a deal guaranteeing not to divert nuclear fuel into weapons programmes.
South Africa has also recently said it will look into enriching its own uranium to supply potential new nuclear power plants. It said it would only do so within international obligations.
In the 1990s, South Africa gave up a nuclear weapons programme it had kept hidden for many years.
Libya admitted in 2003 it had secretly conducted work on nuclear fuel enrichment and renounced its efforts.