Iran disputes the implication. While Tehran has admitted that Natanz is being used for uranium enrichment, it insists the material is strictly for civilian power-generating purposes. Yet when officials from the International Atomic Energy Agency (IAEA) visited Natanz last February, what they saw, says one Tehran-based diplomat, “was pretty surprising. We had no idea they were so technically advanced.”

One building on the site housed 160 functioning centrifuges–bulky, concrete-mixer-size machines that revolve to separate heavy, relatively unstable uranium isotopes from lighter ones when the element is in gaseous form. IAEA chief Mohamed ElBaradei and other inspectors saw components for 1,000 more centrifuges. That is a lot of potential processing technology for a country that has one nuclear power plant. More troubling, the inspectors observed that some Natanz facilities are being constructed deep underground–safe from the threat of aerial attack. “Much of the installation is being built defensively,” says a European diplomat in Tehran. “That obviously gives us cause for concern–that this is not a purely civilian energy program.”

Is Natanz the telltale sign that Iran intends to build nuclear bombs? While international experts are suspicious of Iran’s intentions, the government’s explanation for the plant’s existence might be plausible. Centrifuges are dual-use machines, meaning that they can be used to enrich uranium to make nuclear fuel–or to produce the highly enriched uranium (HEU) that’s a key component of nuclear bombs. It’s not clear just how far the Iranians have gone at Natanz. It takes several months to produce even a small amount of HEU, and the IAEA inspectors found no direct evidence that any had been made. “We’re not sure if they’re hiding it, or if they never started,” says a Western diplomat.

Iranian authorities say they want their own source of nuclear fuel. The country aims to construct as many as six nuclear power plants over the next 20 years. But Iran’s first nuclear reactor, at Bushehr, is being built by Russia’s Ministry of Atomic Energy, and Russia has contracted to provide the fuel and take away the spent rods, which can be used to make HEU. If Iran simply needed uranium-enriched fuel for power, experts say, it’s cheaper to buy it from outside sources like Russia.

In addition to Natanz, two other sites have raised red flags. One is the Isfahan Uranium Conversion Facility. The other has been spotted outside Arak. Last December the Washington-based Institute for Science and International Security warned that what appears to be a “heavy-water” plant is under construction near that city. Heavy water is used in “fast-breeder” reactors to slow neutrons in the reactor core–and fast-breeder reactors are the kind that produce plutonium, a more efficient weapons material than HEU, as a byproduct. Why might Iran need a heavy-water reactor when Bushehr is a safer, light-water plant that can’t be used to make fissile material? No one knows. “The nightmare scenario is that they are pursuing some kind of covert fast-breeder project,” says one diplomat in Tehran. “Though that would be very difficult to conceal.” The consensus among Western sources in Iran is that the Arak plant allows Tehran to “keep its options open,” in case a decision is made to push ahead quickly with a weapons program.

Whatever Iran’s intentions, the country now has the capacity to produce its own nuclear fuel, a spinoff of which could be weapons-grade material. “They more or less have their own fuel cycle now,” says a senior Western diplomat. Once you master the fuel cycle, say experts, the next step–the production of weapons-grade uranium–is a short one. By all accounts, Iran hasn’t yet reached the so-called breakout point–but they’re close. How close? “Months rather than years,” says one ambassador in Tehran. “Single-digit years,” says another diplomat. These eggs may be all too close to hatching.