The head of the UN nuclear watchdog, Mohamed ElBaradei, has appealed to both Iran and the West to refrain from escalating their dangerous game of brinkmanship, which has entered an unpredictable phase following the election of the hardline Iranian President.
"As long as there is no escalation by either side, I think we're on the right track," says the director-general of the International Atomic Energy Agency, who is due to receive the Nobel Peace Prize this weekend.
Talks between Iran and the European Union, which has been leading negotiations aimed at preventing the Iranians from building a nuclear bomb, have been broken off since August, when the Iranians resumed nuclear-related activities at their Isfahan plant.
The main hope of resuming the dialogue resides in compromise proposals from Russia, which is offering to enrich uranium for Iran outside its territory. Uranium enrichment is the critical stage in nuclear power that can produce weapons-grade fuel.
In an interview at the agency headquarters overlooking the Danube in Vienna, Dr ElBaradei noted that Iran has not rejected the Russian proposal outright, and expected "talks about talks" to be held before next month.
But he warned that if Iran carried out a threat to reopen its mothballed Natanz underground enrichment plant, a dangerous escalation would ensue.
"If they start enriching, this is a major issue and a serious concern for the international community," he said.
Although it would take at least two years for Natanz to become fully operational, according to agency officials, Dr ElBaradei said that once the enrichment facility was up and running, "they can be a few months away from a nuclear weapon".
"That's why there is the concern of the international community about Iran, because lots of people feel it could be a dual-purpose programme."
Does he believe the Iranians are building a nuclear weapon?
"The jury's out," Dr ElBaradei said. "Frankly it's difficult to read their intention. We're still going through the programme to make sure it's all for peaceful purposes.
"I know they are trying to acquire the full fuel cycle. I know that acquiring the full fuel cycle means that a country is months away from nuclear weapons, and that applies to Iran and everybody else."
Dr ElBaradei can see no victors from an escalation. "Everybody would hurt," he said. "You would then open a Pandora's box. There would then be efforts to isolate Iran, Iran would retaliate, and at the end of the day you have to go back to the negotiating table to find the solution."
Israel has warned that it will not tolerate a nuclear-armed Iran and has hinted that it would take pre-emptive action, as it did in Iraq when it bombed the Osiraq reactor in 1980.
Prime Minister Ariel Sharon repeated last weekend that "it's clear we can't have a situation where Iran will become a nuclear power".
Iranian President Mahmoud Ahmadinejad has publicly called for Israel to be "wiped off the map".
United States President George W. Bush insists that all options remain on the table, but the reality is that the US already has its hands full in Iraq.
So for now, the Bush Administration is prepared to let Britain, France and Germany continue to take the lead and seek a negotiated solution. The three remain adamant that Iran should be barred from controlling its own nuclear fuel cycle - even under international supervision - and the threat of referral to the UN Security Council remains an option for the IAEA board of governors.
But it is generally believed that Iran holds all the cards at this point. If referred to the Security Council, the Iranians could use their oil-charged political influence to prevent any punitive action. And there remains the fear that the mullahs would pull out of the Nuclear Non-Proliferation Treaty, following the lead of North Korea, which is believed to have enough weapons-grade plutonium for at least six bombs.
Yet despite the dramatic developments in Iran and North Korea, Dr ElBaradei said the most worrying nuclear threat was still the prospect of nuclear terrorism.
"The deterrence concept does not apply in the case of terrorists. That is the most critical danger we are facing right now because there is still a lot of nuclear material and nuclear facilities that need to be adequately protected."
He was talking about the possibility of a "dirty bomb" that could spread radiation and create widespread panic, or the theft of a nuclear weapon.
Although he said such a scenario was "highly unlikely", the countries most at risk were those such as Iraq and Afghanistan where Governments were not in control of their territory.
The Egyptian lawyer has not always got on with the Bush Administration, which tried to block him from serving a second term as agency chief.
His inspectors trying to unravel the biggest network of black-market nuclear trafficking have still been refused access to the scientist at the centre of the scandal: A.Q. Khan from Pakistan, America's major ally in the "war on terror".
Dr ElBaradei was, after all, the man who publicly demolished one of the central planks of the US argument for war on Iraq by revealing in the Security Council that documents purporting to show that the Iraqis had attempted to procure uranium from Niger were fakes.
Now his credibility and authority have been further reinforced by the Nobel Peace Prize, which has added still more to his workload.
Today he will be in London to address the International Institute for Strategic Studies on his ideas aimed at controlling the headlong rush for nuclear power, in particular the uranium enrichment process.
"If you have that capacity you are also buying yourself a smart insurance policy. You are sending a very powerful message to your neighbour - you don't even need to have the weapon," he said.
Dr ElBaradei is calling for the IAEA to control a multilateral "fuel bank" that is intended to remove the justification for countries to develop their own fuel cycle capabilities
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