As a signatory to the Non-Proliferation Treaty, the N.P.T., Iran is prohibited from developing a viable nuclear weapons program. Iran says its nuclear program is aimed at providing an alternate source of energy.

Energy analyst Brenda Shaffer, who heads the Caspian Studies Program at Harvard University, says a nation so rich in oil and gas does not need a costly nuclear energy program.

"The point is that Iran is saying they are not developing nuclear weapons, they are saying they're developing a nuclear energy program," he said. "And for a country that is the largest producer of natural gas in the world and really has very few export markets because the states next door to it are also gas producers and don't need the gas, it's pretty highly unlikely they are actually developing a nuclear energy program but actually a nuclear weapons program."

From the Iranian perspective the pursuit of full nuclear capability is considered a right and, to some degree a necessity, according to Nasser Hadian, who teaches politics at Tehran University. "Their argument is that basically they have acted within the bounds of the N.P.T. and they feel that having control over the entire fuel cycle is very much with the bounds of the N.P.T. and why Iran should be exempted or pressured not to have that advantage," he said.

Tehran has also seen the need for nuclear weapons capability as a deterrence in an unstable and potentially hostile neighborhood, especially with U.S. forces now present in neighboring Iraq and Afghanistan.

But, the possibility of a nuclear Iran has raised concerns beyond the Middle East.

Energy expert Brenda Shaffer says the political splits within Tehran's leadership and the link of hard-line elements to terrorists is troubling. "I would say when we don't really know who controls the materials, you don't really know the state of the program," she said. "You don't know who these people are in touch with in terms of terrorist elements in other countries."

Against the backdrop of the war on terrorism, concerns over Iran's secrecy about its nuclear program have accelerated.

In June, the U.N.'s nuclear monitoring agency issued a statement deploring Iran's shortcomings in its cooperation with IAEA inspections.

The U.S. administration argues that Iran has for too long misled the IAEA about its nuclear program and needs tougher action that only the United Nations Security Council could deliver.

Iran expert Ray Takeyh of the Council on Foreign Relations warns that achieving a consensus among the permanent members of the Security Council for sanctions would be difficult.

"The sanction that would count is an oil embargo," he said. "There's no chance the security council is going to invoke that at a time when China is becoming ever more dependent on Middle East energy supply."

He also cites Russia, which has tightened restrictions on the technology and equipment it supplies for Iran's nuclear energy program but would be reluctant to give up the lucrative contracts.

European allies still favor a dialogue and negotiations to dissuade Tehran from its nuclear pursuits even though they appear to be losing patience with Iran's defiant behavior. Washington is pushing for a much tougher approach.

The next showdown for Iran is the IAEA meeting in September to review its cooperation on inspections of its facilities. But analysts say Iran probably figures it can buy time before tougher action is taken by assuming there will be no dramatic shift in the international community's strategy before the U.S. presidential elections in November.