The question is critical, as Iran this month resumed work on the first part of the nuclear fuel cycle and is pushing for approval to make enriched uranium, the reactor fuel that can also be used to make atom bombs.

In talks with the European Union to obtain trade and other benefits, Iran suspended uranium enrichment in October 2003 followed in November 2004 by all enrichment-related activities.

It broke the total suspension August 8 by resuming uranium conversion work at a facility at Isfahan, but has so far held off on enrichment.

Analysis of comments by Iranian officials and the views of experts show an Iranian strategy of promising to hold off on fuel work but still keeping some work going, while continuing talks with EU nations seeking guarantees that it is not developing nuclear arms.

Hassan Rowhani, Iran's top security official before new hardline president Mahmood Ahmadinejad took office this month, told the Kayhan newspaper in July that Tehran's tactics in the past two years had been to secure postponement of any referral to the UN Security Council while using suspension of some work to focus "all our capabilities on other activities."

The UN could impose sanctions if it believes, as the United States alleges, that the program is not for peaceful use.

"In reality, we have used the time to alleviate many of our shortcomings," Rowhani said, adding that Iran has worked piece-by-piece on converting uranium ore, or yellowcake, into the gas which is refined by centrifuges into enriched uranium.

Iran now has "a significant number of manufactured centrifuges ready for use," he added.

But David Albright, a Washington-based, non-proliferation analyst, said the suspension had kept Iran from running centrifuges, and failure to master this crucial technology put their whole nuclear capability into question.

Albright, a physicist and former nuclear weapons inspector, pointed to a US assessment that Iran was a decade away from making highly enriched uranium to make an atom bomb as "a judgement of the Iranian centrifuge program."

"They have not demonstrated that they can pull this thing together" and have not yet run a 164-centrifuge cascade built at Natanz, Albright said.

"On conversion one can argue that the Iranians have made progress," he told AFP. "On centrifuges, they haven't been able to operate this 164-centrifuge cascade. Until they do, they don't have a program."

Others are less dismissive.

In Israel, military intelligence chief General Aharon Zeevi told parliament this week that Israel expects Iran to be capable of producing a nuclear weapon within three years, parliamentary sources there said.

Zeevi said a newspaper report of the US assessment may be a deliberate leak to provide cover for inaction on Iran while US forces are stuck in Iraq.

Separately, an expert close to the UN watchdog International Atomic Energy Agency said: "If you make a flow chart of developing a nuclear program, you can see what the Iranians have done over the past two years even while negotiating with the European Union."

Rowhani's successor as nuclear policy chief, Ali Larijani, has said Tehran will not renounce its resumption of uranium conversion and the EU must accept Iran going all the way to enrich uranium.

The EU insists Iran must resume full suspension, to which incoming Foreign Minister Manouchehr Mottaki called this week for continuation of negotiations "without any pre-conditions."

Last month, Rowhani said that when activities in Natanz were suspended, "we devoted our energy to Isfahan." Then, while work at that plant was suspended, attention turned to fixing "other deficiencies."

Gary Samore, a non-proliferation analyst at the International Institute for Strategic Studies in London, said Iran resumed activities at Isfahan because it "needs to work out bugs in their conversion process," apparently with removing contaminants.

A non-Western intelligence expert said that during the suspension, "there was massive activity to fix the failures" in Isfahan.

"It is not likely they will encounter major hitches after their considerable effort to upgrade the systems," the expert said, adding that Iranian tactics have been to hold off on nuclear work when they did not need it, then force a crisis when they wanted to run specific machines.

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