Iranian President Mahmoud Ahmadinejad has been called a "paper tiger" and a "global threat," often in the same breath.

Iran's recent claims of state-of-the-art military developments have Middle East experts concerned. But because Tehran's leaders have a propensity for hyperbole, it's hard to tell sometimes just how much concern is truly necessary.

On Monday Iran launched production of a mid-size submarine it says will be able to fire missiles and torpedoes. Earlier this month, Tehran announced it had successfully test-launched a rocket capable of carrying a domestically built satellite into space. Tehran also said it has upgraded its warplanes to be able to reach Israel without refueling.

And all of this comes as Iran continues, despite sanctions from the West, to pursue a nuclear program that it claims is for power production but that the U.S. and its allies believe is for building a nuclear bomb.

Retired Rear Adm. Harold Bernsen, the former Commander of U.S. Middle East Force during the Iran-Iraq War, said it's hard to know what, if anything, should be taken seriously.

"These announcements, which may or may not be true, are bargaining chips and means for intimidation," said Bernsen. "They are basically lying, a common tactic I saw it on the part of the Iranians. Sometimes you can believe them, sometimes you can't, but they are very convincing when they try to persuade you."

Over the years, Ahmadinejad has threatened to wipe Israel "off the map" and launch missiles at its regional neighbor and its supporters. Iran has said it would attack U.S. military bases in the Middle East and close off the Strait of Hormuz, a critical waterway located between Iran and Oman through which 40 percent of the world's oil is transported.

If the Iranians follow through on their threat to close the strait, analysts say the negative effect on the American oil supply and overall economy would be swift and brutal, sending already skyrocketing shipping rates and oil prices even higher.

But just as America's oil supply would be hurt, so too would Iran's. It, too, relies on the strait to transport oil, Iran's main source of income, back from inside the Gulf, experts say.

"This business about closing the Strait of Hormuz -- everyone's always talking about the Iranian threat to Strait of Hormuz and to our shipping passage. It's not going to happen," said Bernsen. "It would be beyond cutting off your nose to spite your face."

The United States' inevitable reaction also provides a major deterrent. Cutting off the American oil supply would be a declaration of war. And while threats from Tehran have historically come up empty, Patrick Clawson, deputy director at the Washington Institute for Near East Policy, said Iranian leadership is too unpredictable to render its threats meaningless.

"Iranians have repeatedly threatened to block the Strait of Hormuz for last 40 years," Clawson said. "The time when they actually did block the strait, the Iranians had not made any threats. There is of course the possibility that they might do something, and the U.S. Navy has certainly been busy trying to do something about that."

In fact, in recent weeks an armada of American, British and French warships has reportedly moved into the Persian Gulf, within striking distance of the Strait of Hormuz. This comes on heels of the participation of these same countries in Operation Brimstone, naval military drills conducted over 10 days in the Atlantic Ocean to prepare for an Iranian blockade in the Strait of Hormuz.

There are also reports that Iran has just completed military drills of its own in the Gulf, to improve combat readiness and capability.

Ahmadinejad continues to say that his military is one of the most advanced in the world and is a powerful deterrent to its enemies. He says Iran could go up against the United States -- and win.

But in its effort to appear powerful, Iran has been caught inflating and overstating its capabilities.

Last month, Iran said that it test-launched a series of missiles in the Persian Gulf that were capable of striking Israel. It was later revealed that photographs of the launch -- taken by the Iranian government and distributed in the press -- had been doctored.

Then, is was discovered that Iran's fighter jets that military leaders had announced were overhauled with new state-of-the-art technology were in fact not as advanced as they claimed.

"Iranian conventional military capability is not very good due to age, lack of investment, so they've put their resources into asymmetrical capability," Bernsen said. "So when something blows up they can say, 'Hey, it wasn't me.' But of course it was."

"The leadership is a bit on the grandiose side," said Charles P. Vick, an Iranian missiles expert with research group GlobalSecurity.org. "[Ahmadinejad] keeps on advertising, 'Look at what we have today, Na Na Na Na,' but big deal!

"If Iran would take on the U.S., it would lose automatically, and that's understood by them."

But it isn't Iran's ability to wage a conventional war that's of greatest concern.

The U.S. and its allies have accused Iran of trying to develop nuclear weapons under the cover of a civilian nuclear program. Tehran, says it has a right to develop nuclear power and insists its nuclear program is for peaceful purposes only.

"They are saying the same thing as the French about shifting their energy resources to nuclear power; actually, it's also quite similar to McCain's energy policy," said John Voll, associate director of the Prince Alwaleed bin Talal Center for Muslim-Christian Understanding at Georgetown University.

But some say Iran's geographic location -- surrounded by such nuclear powers as Pakistan, India and Israel -- sets the scene for a nuclear arms race.

Vick said the recent showcase of advanced technologies could be indicators that Iran may not just be moving toward developing a nuclear bomb; it may simultaneously be pursuing the development of missiles to launch it.

"Space development is really a deception," Vick said. "Space development is really supporting the strategic development of ballistic missiles."

It's unclear how far along Iran is with these developments, and experts differ in their estimates (they range anywhere from 3 months to 3 years), but many agree that there is progress, specifically with missiles.

"Why does any country develop long-range ballistic missiles except for weapons of mass destruction? You don't. That's the concern," Vick said. "You don't build missiles to launch firecrackers. You build missiles to build nuclear warheads to wipe everybody out."

Right now it is up to the U.N.'s nuclear watchdog -- the International Atomic Energy Agency -- and the Security Council to push Iran to come clean on its nuclear program while inspections of its nuclear facilities continue to track activities.

The Bush administration said it will focus on diplomacy to try to resolve Iran's nuclear issue, but insists it will take "no option off the table."

Some expect Ahmadinejad's public relations campaigns to continue, which could include more high-tech announcements and missile test launches. But in true Iranian style, it may be hard to know what is truly advancement or just another show.

"They're making progress in area that has very ominous meaning to it. How long will it be before they unleash what they really have?" Vick said.

"The next administration is going to have to decide what to do with all this: Full isolation? Take them out? Can we resolve this strategically?"