ElBaradei was speaking at a two-day conference in Luxembourg aimed at "preventing nuclear catastrophe," organized by Russian Jewish Congress Chairman Viatcheslav Kantor.
"Its very difficult to say how close a country is to nuclear weapons," ElBaradei said during a press conference. "Iran is expanding its knowledge and capacity. It now has over 1000 centrifuges. I have expressed concern over this because the Agency is unable to conduct a robust and full inspection," he added.
"My current priority is to carry out a comprehensive inspection," ElBaradei said, adding that he estimated Iran was "three to eight years" from being capable of producing nuclear weapons.
The IAEA chief has come under criticism in recent days for suggesting that Iran has made so much progress on its nuclear program that the world should accept as "fact" that Iran will have the independent ability to enrich uranium.
On Wednesday, the IAEA released a report saying Iran was operating 1600 centrifuges independently. US officials have described the report as "alarming," while Iran said the report was "devoid of any new points."
"We could end up with a major confrontation," ElBaradei reiterated. "Iran needs to listen to the international community and suspend enrichment, but the international community also needs to engage Iran. We need a comprehensive settlement," he added, saying, "the status quo is unacceptable."
The IAEA head added that the issue represents "an emerging threat in a region that is in an absolute mess right now."
Nuclear weapons expert Mark Fitzpatrick told Ynetnews that ElBaradei's estimates may be too optimistic. "If everything goes smoothly for Iran, it will be 2 - 3 years away from being able to produce nuclear weapons," he said. "It seems Iran is on track to having 3000 centrifuges by the middle of this summer. It will take them about a year to get a hold of the technical issues and another year to enrich the uranium, hence my estimate of two years," he added.
Fitzpatrick noted that up until 2003, no less than 10 indicators were found to strongly suggest that Iran's nuclear program had a military purpose. "After 2003, all those signs stopped," he said. "Did the Iranians stop? Or is it more secretive? There's no reason to believe they stopped," he added.
'Attack on Iran would be catastrophic'
Meanwhile, speaking to Ynetnews, former UN weapons inspector Hans Blix said a military strike on Iran would be a "catastrophic" option.
Blix, who is currently Chairman of the Weapons of Mass Destruction Commission, said previous military operations at nuclear programs, such as Israel's strike on Iraq's Osirak plant in 1982, served to slow the nuclear program, but added that only a "durable occupation or regime change" could ensure that the program is not restarted.
"In all likelihood, an attack on Iran would be catastrophic," Blix said, adding that the strike would rally support for Iranian President Ahmadinejad.