The International Atomic Energy Agency is scheduled to meet Thursday in Vienna and is expected to refer the issue of Iran's nuclear program to the United Nations Security Council.

The United States and Europe believe Iran is seeking to develop nuclear weapons. But Tehran says its program is aimed at producing fuel for peaceful, civilian purposes.

During a recent news conference with German Chancellor Angela Merkel, President Bush said it is unacceptable for Iran to build a nuclear arsenal. He says, "Iran armed with a nuclear weapon poses a grave threat to the security of the world."

Many experts say the international debate centers on trying to forecast Tehran's intentions. Sammy Salama is an expert on Iran with the Monterey Institute of International Studies.

According to Mr. Salama, "While the Iranians claim that they have no interests in nuclear weapons, that they are mainly interested in nuclear technology, obviously there is a lot of suspicion in the West that Iran is really ultimately seeking to achieve a nuclear weapons program that will allow it to build nuclear warheads."

For his part, David Albright, President of the Institute for Science and International Security, says there are questions surrounding Iran's nuclear weapons intentions.

Mr. Albright says, "When you think about a nuclear weapons program, you think of something put on a missile that can be delivered to a target and blow up and cause immense damage. There isn't good evidence that says Iran has an active program to make nuclear weapons themselves. It's a very difficult area to investigate and Iran vehemently says it has no such program. So the debate on whether they have a nuclear weapons program really is a debate -- with different sides discussing various amounts of information, usually not the greatest information. My own assessment is that Iran does have intentions to build nuclear weapons, but it has not made a final decision - and this means a government decision -- to actually go ahead and put together a nuclear arsenal."

Experts do agree that Iran is setting up facilities that will allow it to be able to build nuclear weapons. Daryl Kimball, head of the Arms Control Association, says Iran is approaching the point where it can produce -- on an industrial scale -- enriched uranium.

According to Mr. Kimball, "Low-enriched uranium can be used for fueling nuclear power reactors, but highly-enriched uranium, which can be produced at the same types of facilities, can be used -- as needed -- for a nuclear bomb. So Iran has said repeatedly that they have no intention to pursue nuclear weapons, that they don't have a weapons program. But the concern is, that given Iran's past history, the fact that there are some activities that have not been fully explained, that are suggestive of nuclear weapons related research -- that Iran is pursuing this path in order to at least have the nuclear weapons option."

Little Progress Toward a Resolution

For the past several years, three European countries - Britain, France and Germany - have been negotiating with Iran. Their efforts were aimed at providing Iran with economic incentives in exchange for curtailing its uranium enrichment activities.

The talks made little progress and in August, Iran resumed uranium conversion - that is converting uranium ore into gas. That is the first step in a process that could allow Tehran to enrich uranium either for peaceful purposes or to build a bomb.

Following Iran's decision to resume uranium conversion, the International Atomic Energy Agency, in September, judged Tehran to be in non-compliance with the safeguards agreements it has with the I.A.E.A.

David Albright, with the Institute for Science and International Security, says the I.A.E.A. stopped short of referring Iran's case to the United Nations Security Council. He says, "The reason was that at that point, Russia emerged with a possible compromise, which is that Iran could operate the uranium conversion facility to make what is called uranium hexafluoride -- using natural uranium, not usable at all in nuclear weapons -- and that material would then be sent to Russia and enriched there. And then that enriched uranium would be sent back to Iran for use in its power reactors. And in that, Iran would give up building an enrichment plant."

Iran's reaction to the Russian proposal has been lukewarm, saying it needs more work.

Experts say the crisis escalated when earlier this month, Iran broke I.A.E.A. seals at the uranium enrichment facility at Natanz.

What Next?

Reacting to that move, the United States and other permanent members of the U.N. Security Council, including China and Russia, agreed that Thursday's meeting of the I.A.E.A. Board of Governors should refer Iran's case to the U.N. Security Council for possible punitive actions.

Daryl Kimball says that action would increase tensions considerably. He says, "The view of some, including here in Washington and the Bush administration, is that this increase in pressure could persuade the Iranians to back down. There are others who believe that this could increase the hand, the power, the leverage of those in Iran who want to press forward and who want to seek confrontation."

Iran has reacted angrily, saying any referral would mean an end to diplomacy.

But experts say there is some breathing room. The U.S. and other members of the U.N. Security Council said any action by the Council should await a report by the I.A.E.A. Director to the organization's next meeting, scheduled March 6th.

Between now and then, analysts hope measures could be found to defuse the situation.

This story was first broadcast on the English news program,VOA News Now. For other Focus reports click here.