(BBC News) - The announcement by Iran that it has for the first time produced enriched uranium is significant in two ways.
First, it shows that Iran has the technical ability to take this essential step along the path to making nuclear fuel - a path that could also take it to the point where it could make a nuclear bomb, though it says that is not its intention.
Indeed, it says that it enriched only to 3.5%, the level needed for nuclear fuel and way below that needed to make a nuclear bomb, about 80%. Its announcement comes much earlier than many experts had expected, though.
Second, it raises the stakes in the dangerous diplomatic game that is now under way.
Iran is defying demands made by the UN Security Council in March to suspend its enrichment activities while talks take place about the future and the United States is growing increasingly concerned about Iran's long-term intentions.
Iran's defiance and determination is shown by the fact that it made its announcement on the eve of a visit by Mohamed ElBaradei, the director general of the UN's nuclear watchdog, the International Atomic Energy Agency (IAEA).
Mr ElBaradei is making his visit in order to check Iranian compliance with the Security Council demand. He now knows what the Iranian answer is.