Iran insists the highly enriched uranium is for use in a medical reactor, but experts say that enriching uranium to such a level is an important step on the way to producing weapons-grade uranium, which must be enriched to 90 percent. A February IAEA report confirmed that Iran had enriched uranium to 20 percent and that the IAEA could not rule out "current" work on weaponization.
What new sanctions are being considered?
Before the Iranian elections last year, Washington had made several diplomatic overtures to Iran. But now the equation has changed.
"The Obama administration certainly doesn't want to pursue measures that could slow the momentum of the green movement or provide the Ahmadinejad government a pretext for its profound economic mismanagement," says Karim Sadjadpour, an analyst at the Carnegie Endowment for International Peace in Washington.
While Russia has shown increasing willingness to support new sanctions, China remains opposed. Both nations hold veto power. Iran is the second-largest supplier of oil to China, which has large investments in Iran's energy sector.