Monday’s announcement that Iran will convert 37 tons of raw uranium into fuel for nuclear centrifuges raises fears that Teheran is moving closer to having a nuclear bomb, although Iran's President Mohammed Khatami insisted that they are processing the uranium for nuclear energy. To be powerful, Khatami said, Iran "must be equipped with all forms of advanced technologies."
Why now? Experts say Iran feels surrounded — with U.S. forces on its borders in Iraq and Afghanistan, and Israel's secret nuclear program not far away.
In fact, the U.S. and Israel suspect Iran's secret facilities may be only months from producing enough nuclear material for a bomb.
The Bush administration says it won't let that happen.
"I can assure you we're not going to allow America's national security to be dependent on the good faith of a group of fanatic mullahs seeking nuclear weapons," says Undersecretary of State John Bolton.
Is there a military option?
Not an easy one. Iran's nuclear program is spread out over many locations, all buried deep underground.
But Monday, Israeli reports said the United States will sell Israel 500 "bunker buster bombs" — ideal for use against Iran's underground facilities. In 1981, Israel bombed an Iraqi nuclear reactor before it could become a threat.
Short of a military strike, the U.S. must rely on the United Nation’s nuclear inspectors. But, as with Iraq, once again the administration is sharply divided: hard-liners tell NBC News they don’t trust the U.N.
U.S. officials tell NBC News that the U.S. has even been spying on the United Nation’s top nuclear inspector, Mohammed ElBaradei. Some U.S. officials say he has been coaching Iran to avoid detection.
"I think that is rubbish," says ElBaradei. "Look, if I have been coaching the Iranians, I have been coaching the Iranians to tell them they ought to cooperate, that they need to be transparent."
ElBaradei has some defenders in the administration, who disagree with his hard-line critics.
The result, says Iranian expert Geoffrey Kemp, is paralysis: "The first priority for the administration should be to get a policy. The administration is divided on what to do about Iran," he says.
Once again, as with Iraq, the U.S. is increasingly isolated from the rest of the world, which even now refuses to see Iran as a real danger.