Iran insists its nuclear programme is for peaceful purposes
Israeli Deputy Prime Minister Shaul Mofaz has warned that Iran is near a breakthrough in its nuclear programme.
Mr Mofaz accused Iran of pursuing a strategy of buying time in talks aimed at limiting its nuclear ambitions.
The EU and the US have offered Tehran a series of incentives in a bid to halt its uranium enrichment. Iran has not yet responded to the offer.
Mr Mofaz, known for his hard-line stance on Iran, is a candidate to become Israel's next prime minister.
Current Israeli PM Ehud Olmert has announced he will step down in September.
Speaking on a visit to Washington, Mr Mofaz said it was "unacceptable" for Iran to become a nuclear power.
"Our estimation is that already by  Iran will reach enrichment capability and as soon as 2010 will have option to reach [uranium production] at military levels," he said, according to the AFP news agency.
"It's a race against time and time is winning," the Israeli minister added.
Iran had been set a deadline of this weekend to respond to a proposal from the five permanent members of the UN Security Council and Germany to suspend uranium enrichment.
Iran says it will offer its own ideas on the issue
The Security Council has already imposed three sets of sanctions, and a fourth could follow if the current offer is rejected by Tehran.
But, says the BBC's Jon Leyne, setting Iran a deadline always threatened to be counter-productive, especially when there was no immediate penalty for not complying.
Iran has said it will offer its own ideas in its own time - perhaps in the next two weeks.
For their part, the European Union and the United States, who are co-operating on this initiative, have been giving mixed messages on how precisely and how seriously they view the deadline, our correspondent notes.