Satellite images show that Iran's Arak heavy-water plant is operational, raising fears that it is trying to produce plutonium for a nuclear bomb, Britain's Daily Telegraph reported on Tuesday.
The newspaper published images on its website which appear to show steam rising from forced air coolers, suggesting heavy-water production at the plant, which has been closed to international inspectors for 18 months.
Heavy water is required in plutonium-producing reactors and that raises alarms that Tehran is seeking a second path to obtain the bomb.
Stuart Ray of consultancy firm McKenzie Intelligence Services told the Telegraph that the images, commissioned from commercial satellite operators, suggested that the heavily-guarded facility was “operational.”
According to the paper, western governments have known about activity at Arak for some time.
Plutonium is produced as part of the mix in spent nuclear fuel, along with unused uranium. To make plutonium usable, a reprocessing plant is needed to separate it from the other materials in spent fuel. It can then be embedded into the core of a nuclear weapon.
International efforts have so far been concentrated on the Islamic Republic's attempts to enrich uranium, but the Telegraph noted that the new evidence shows it is developing a "Plan B".
"Some think Israel's red line for military action is before Arak comes online," Mark Fitzpatrick, a former U.S. State Department official at the International Institute for Strategic Studies, told the Telegraph.
"The option of a military strike on an operating reactor would present enormous complications because of the radiation that would be spread," he added.
International Atomic Energy Agency inspectors have been barred from the site since August 2011 and Iran has rebuffed appeals for information about the facility, the report noted.
The report came as world powers and Iran on Tuesday exchanged offers at talks in Kazakhstan aimed at breaking a decade of deadlock over Tehran's disputed nuclear drive.
A Western source told AFP the world powers are offering Iran permission to resume its gold and precious metals trade as well as some international banking activity which are currently under sanctions.
Iran, in exchange, will have to limit sensitive uranium enrichment operations that the world powers fear could be used to make a nuclear bomb.
Iran denies it is developing nuclear weapons and wants the world to respect its "right" to enrich uranium, something current UN sanctions say it cannot do because of its refusal to cooperate with nuclear inspectors.
A report released last week by the International Atomic Energy Agency (IAEA) says that Iran has begun installing next-generation equipment at one of its main nuclear plants in Natanz.
Iran has claimed that the report is proof that its nuclear program is intended only for peaceful purposes.