Iran will have enough enriched uranium to make a single nuclear weapon later this year, the International Institute for Strategic Studies predicts.
The think tank's Mark Fitzpatrick made the announcement at Tuesday's launch of its annual global review of military powers.
"During 2009, Iran will probably reach the point at which it has produced the amount of low-enriched uranium needed to make a nuclear bomb," said Fitzpatrick. "But being able to enrich uranium is not the same as having a nuclear weapon."
However, the survey reports doubts over U.S. Intelligence estimates that Iran halted its work on nuclear weapons six years ago.
This points to Tehran's continued development of long-range ballistic missiles able to reach targets in Israel and beyond.
The IISS recommends a mixture of carrot and stick as the best international response.
It concluded a dual policy of engagement and sanctions, testing possibilities for Iranian cooperation while adopting targeted containment strategies, is the best way to deal with Iran's nuclear program.
Foreign affairs editor Tim Marshall said: "Several think-tanks have come to the same conclusion.
"The intelligence agencies are more reluctant to put a time frame on it, and the report itself says having enough enriched Uranium to build the warhead is not the same as building the warhead itself."