The report, composed by the institute founded by nuclear expert David Albright, offered a more temperate view of Iran's nuclear program than some of the heated rhetoric that has surfaced since the United States and its allies stepped up sanctions on Tehran.
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"Iran is unlikely to decide to dash toward making nuclear weapons as long as its uranium enrichment capability remains as limited as it is today," the report said.
The United States and Iran are engaged in a war of words over sanctions, with Iran threatening to retaliate by blocking oil shipping traffic through the Strait of Hormuz. The United States said it would not allow that to happen.
The escalating rhetoric and tensions have led to concerns about the potential for missteps between the adversaries that might spiral into a military confrontation that neither wants.
But the report said Iran had not made a decision to build a nuclear bomb: "Iran is unlikely to break out in 2012, in great part because it is deterred from doing so," the ISIS report said.
The report added that sanctions and the fear of a military strike by Israel on Iran's nuclear facilities have worked as a deterrent.
The Isfahan uranium conversion facility (Photo: EPA)
The institute has advised US and foreign governments about Iran's nuclear capabilities and Albright is considered a respected expert on the issue. The report tracks closely with what is known of official US government assessments.
US officials say Iran has not made the decision to build a nuclear weapon and that Iranian leaders haven't made the decision because they have to weigh the cost and benefits of building a nuclear weapon.
Much of what the Iranians are doing with their nuclear program has civilian uses, but they are keeping their options open, which significantly adds to the air of ambiguity, US officials told Reuters on condition of anonymity.
Some conservative and Israeli analysts in the past have challenged these types of assessments, asserting that Iranian nuclear efforts are sufficiently advanced that they could build a bomb in a year or less.
Will they or won't they?
But according to the institute's report: "Although Iran is engaged in nuclear hedging, no evidence has emerged that the regime has decided to build nuclear weapons.
"Such a decision may be unlikely to occur until Iran is first able to augment its enrichment capability to a point where it would have the ability to make weapon-grade uranium quickly and secretly," the report said.
It added that despite a report last November by the United Nations' International Atomic Energy Agency alleging that Iran had made significant progress on nuclear weaponization, "Iran's essential challenge remains developing a secure capability to make enough weapon-grade uranium, likely for at least several nuclear weapons."
Some European intelligence officials have disputed a US National Intelligence Estimate published in 2003 which said that Iran had stopped working on a program it had launched earlier to design and build a bomb.
The Bushehr nuclear power plant (Photo: EPA)
The Europeans maintain that Iran never stopped research and scientific development efforts which could be bomb-related.
Among possible policy options for halting Iran's nuclear program, one of the least likely to be successful is a military attack on its nuclear program, according to the institute's report.
Limited military options, such as airstrikes against nuclear facilities, are "oversold as to their ability to end or even significantly delay Iran's nuclear program," the report said. Limited bombing campaigns would be "unlikely to destroy Iran's main capability" to produce weapon-grade uranium, it said.
Iran has taken precautions by dispersing the centrifuges it uses for enrichment to multiple locations, has mastered the construction of centrifuges, and has probably stockpiled extra centrifuges, ISIS said.
A bombing campaign that did not totally eliminate these capabilities would leave Iran "able to quickly rebuild" its nuclear program and even motivate it to set up a Manhattan Project-style crash program to build a bomb, which would only make the region more dangerous and unstable, according to the institute.
The report said that clandestine intelligence operations aimed at detecting secret Iranian nuclear activities, including the construction of new underground sites, are "vitally important."
It added that another "well known tactic" used by Western spy agencies against Iran has been to infiltrate Iranian networks that smuggle nuclear-related equipment and supply them with plans or items which are faulty or sabotaged.
Other more violent covert operations strategies, particularly the assassination of Iranian nuclear scientists and engineers, have "serious downsides and implications," such as high risks of Iranian retaliation through militant attacks which could be directed against civilian targets. The United States has emphatically denied any involvement in the assassinations.
The report said that since thousands of specialists are involved in the Iranian nuclear program, assassinations were unlikely to be effective in slowing it down. It also warned that Iran could construe assassinations as acts of war and use them to justify retaliation.
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