Iran is on the cusp of being able to triple output of nuclear material that, if further treated, could be used in the core of a bomb, a new UN atomic agency report showed.
The International Atomic Energy Agency (IAEA) quarterly update said that fitting out of the Fordo plant was now "complete" -- despite extreme sanctions pressure.
Fordo, which Iran only told the IAEA about in 2009, began in 2011 to enrich uranium to purities of 20%, a process that lies at the heart of the international community's concerns.
Enriched to this level, uranium can be used to produce medical isotopes -- Iran's stated intention -- but when further enriched, a relatively easy process, it can go in a bomb.
If Iran uses the new machinery at Fordo to enrich uranium to 20% levels -- it has not told the IAEA whether this is its aim technically -- production could increase from 15 kilos per month now to around 45 kilos, a source said.
Experts say that around 250 kilos of 20% uranium is needed to convert into enough 90% material for one nuclear weapon.
However, deciding to "break out" and enrich to 90% would quickly be detected by the IAEA, likely sparking military action by Israel and the United States.
Making a bomb also requires a whole range of other activities such as working out how to get the fissile material to explode, and putting it in a warhead in a missile.
The IAEA's findings "provide further troubling evidence that Iran is continuing to pursue sensitive nuclear fuel-cycle activities in violation of UN Security Council resolutions and is slowly enhancing its nuclear weapons breakout potential," analyst Daryl Kimball of the Arms Control Association said.
'Years not months' from workable nuclear arsenal
"However, Iran remains years, not months away from having a workable nuclear arsenal if it were to choose to pursue that capability. Given this reality, it is clear that new and more energetic diplomatic efforts are necessary to reduce the risk of a nuclear-armed Iran."
Supporting Iran's argument that its nuclear programme is peaceful was the IAEA's other finding: around 40% of the 230 kilos of 20%-enriched uranium produced so far has been converted for use in a research reactor.
However, the rate of conversion to uranium oxide powder slowed significantly, and once Fordo is fully up and running the plant will be producing far more than can be justified for Iran's civilian programme in its current form, analysts say.
Iran "appears to be calibrating the progress so as not to make huge advances at once that could spark a crisis," Mark Fitzpatrick from the International Institute for Strategic Studies think-tank in London told AFP.
"The situation might be likened to the frog in the hot pot, with the temperature being turned up only slowly."
The report comes amid a renewal of efforts -- stalled during the US election campaign that saw Barack Obama re-elected on November 7 -- to reach a diplomatic solution.
In June at high-level talks in Moscow, Iran spurned a call by the "P5+1" world powers -- Britain, China, France, Russia, the United States, and Germany -- for it to close Fordo and take other steps.
Its rejection was thought to be because the six powers stopped short of offering significant and immediate enough relief from sanctions that have started to hit the Iranian economy hard in recent months.
EU foreign policy chief Catherine Ashton, the chief P5+1 negotiator, is due to chair a meeting of the six powers in Brussels on Wednesday, and a new round of talks with Iran is expected in early 2013 at the latest.
The IAEA, meanwhile, is due to hold talks of its own with Iran in Tehran on December 13.
These are aimed at persuading Iran to respond to "overall, credible" claims set out in a major IAEA report a year ago that until 2003 and possibly since, Tehran conducted nuclear weapons research work.
In September the head of Iran's atomic agency, in a speech at the IAEA's annual meeting of all member states, did little to improve relations when he accused the UN body of being infiltrated by saboteurs and "terrorists".