In his tenth-floor office at the International Atomic Energy Agency (IAEA) in Vienna, Olli Heinonen has a bowl of pistachios on his desk. He brought them back from Iran -- a place he's visited so often he's stopped counting.

There's probably no one better informed than the Finn about what's actually going on inside Tehran's controversial nuclear program. Heinonen, as the IAEA deputy director, is responsible for nuclear inspections around the world. Before being promoted to that position, Heinonen was in charge of the agency's Department B, which deals with Iran and is internally described as "B" as in "busy."

Heinonen and his team certainly have had plenty to do in Iran over the past four years. They've installed surveillance cameras, questioned scientists and taken countless ground samples to the high-tech IAEA laboratory near Vienna. They've written up dozens of reports about the Iranian efforts that were long carried out in secret. But the key question remains: Is Iran's uranium enrichment program only meant to be used for civilian purposes, as claimed by the regime in Tehran? Or is the country trying clandestinely to build a bomb?

The work done by the IAEA is critical. Whatever Department B finds will help shape the debate within the international community. Even the US intelligence agencies with their $800 million weekly budget are largely dependent on information from Vienna -- it's the IAEA technicians and not Washington's agents that are actually going in and out of Iran's nuclear facilities.

Deciding questions of war and peace

Inspections can make the difference between war and peace, as IAEA Director Mohamed ElBaradei said after the debacle in Iraq involving supposedly sound evidence of Saddam Hussein's arsenal of weapons of mass destruction. In Iran's case that means as long as the country isn't enriching uranium on an industrial scale, there won't be enough material for a bomb. Even the hawks in Washington, who are becoming more vocal all the time, have a hard time making the case for a military intervention.

But how long can the IAEA continue to provide answers and information with both credibility and authority?

The worst case scenario making the rounds at the IAEA these days is that the UN Security Council does what the United States is pushing for and slaps sanctions on Iran. That then causes Tehran to retaliate by carrying out its threat to bar ElBaradei's inspectors from the country. Or, Iran could follow the example of North Korea and even ditch the Nuclear Non-Proliferation Treaty (NPT) entirely.

Then the IAEA would essentially be blind. And each week without inspections would increase the uncertainty about what was truly going on in Iran's nuclear facilities. Theory, analysis and a flood of so-called experts would suddenly hold sway instead of actual facts.

Inside the IAEA this is known as the "Iraq Scenario." Saddam Hussein tossed inspectors out of the country in 1998, which ended up making it easier for the Bush administration's hawks to use exaggeration and outright lies to try to convince world opinion of the need to invade Iraq.

Hawkish report angers IAEA

There are already the first attempts to shape the debate surrounding the dispute with Iran. In recent weeks, an IAEA letter has surfaced that harshly criticized a report by a US Congressional intelligence committee. The 29-page document supposedly grossly exaggerated the state of Iran's nuclear research and claimed ElBaradei had caved to Iranian pressure to remove a particularly critical IAEA expert from the list of inspectors. The report even went so far as to infer that Nobel Peace Prize winner ElBaradei was more interested in having good ties with Tehran than finding out the truth.

The IAEA called the report "upsetting and misleading" and Heinonen and his experts found at least five fundamental mistakes in it. The worst was the claim that Iran had enriched uranium to 90 percent -- that is, weapons grade. But the IAEA had only found uranium enriched to 3.5 percent in Natanz.

Such hyperbole can't be explained as simple sloppiness. One of the authors of the report is the former CIA official Frederick Fleitz, a hawk who's previously worked for John Bolton, US ambassador to the United Nations. "It's just like before the Iraq war," says David Albright, a respected US nuclear expert. "They blow up the threat with windy information and attack the IAEA."

Up till now such attempts haven't been very effective. It wasn't the report from the House intelligence committee that made headlines -- it was the criticism from Vienna. However, the authority with which Heinonen's outfit can discredit such attempts has become quite limited. Since the IAEA governing council transferred its dossier on Iran to the UN Security Council in February, Tehran has refused to allow inspections in accordance with an addendum to the NPT that enables inspectors to conduct thorough checks.

Talks instead of sanctions

Instead, the Iranians are only allowing inspectors access to those locations where nuclear material is handled. That means Natanz, where centrifuges are spinning, is still on the list. But the facilities where centrifuges are built no longer are. Inspectors are worried they're no longer seeing the entire picture of Iran's nuclear program.

Diplomats from the five permanent UN Security Council members -- the United States, Britain, France, Russia and China -- plus Germany are presently debating the next steps to take. But it's a difficult balancing act: Iran has shown itself unimpressed by the international community and is refusing unconditional cooperation with the IAEA. Doubts about Tehran's peaceful intensions are certainly more than justified. Accordingly, US officials are saying it's time to take action.

Those close to ElBaradei say he is spending a lot of time on the phone lately. US Secretary of State Condoleezza Rice, German Chancellor Angela Merkel and her foreign minister, Frank-Walter Steinmeier, have been on the other end of the line. At the moment it seems that a consensus is forming for further talks rather than immediate sanctions, and that ElBaradei may get his way.

That could head off an escalation and the "Iraq Scenario" -- for now.