The new president of Iran, Mahmoud Ahmadinejad (search), took office Wednesday amid continuing uncertainty about exactly what his nation is up to in its pursuit of nuclear weapons.

Click in the box to the right to watch a report by FOX News' Major Garrett.

As the inauguration of Ahmadinejad took place in a Shi'ite ceremony, Iranian officials backtracked from a declaration that on Wednesday Tehran would re-start a uranium conversion plant that could enable it to develop nuclear weapons. Officials said the government only put off the resumption of work at the plant for days.

Even as president, Ahmadinejad is to some extent a mere figurehead. The real ruler of the nation is Grand Ayatollah Seyyed Ali Khamenei.

"All power in Iran is held by the Ayatollah Khamenei. He is the head of the theocratic dictatorship known as the Islamic Republic of Iran, his title is 'supreme leader,' and he means it," said Michael Ledeen, a scholar at the American Enterprise Institute.

"[Ahmadinejad] only matters if the supreme leader Khanamei wants him to matter," said Ken Pollack, a Middle East specialist at the Brookings Institution.

At his inauguration, Ahmadinejad, a fundamentalist opposed to political liberties sought by Iranian students and workers, spoke predictibly of Iranian rights as defined by the ruling mullahs.

"I will defend the independence and national interests of the country as well as Islamic customs. I will defend the rights of Iranians who are inside or outside the country," the new president said.

During the ceremony, the exaggerated, strident anti-American rhetoric was reserved for Khamanei.

"All the powerful and mighty powers of the world, especially the great Satan, America, should know that the Iranian nation will not surrender to any power," he said.

The United States isn't seeking Iran's surrender, only an end to what it and top European nations say they fear is a secret effort to produce nuclear weapons. Some analysts, including Ledeen, say it's a legitimate national security concern.

"I believe that Iran has sucessfully hidden a large part of their nuke program," he said.

On the eve of Ahmadinejad's inauguration, Iran announced it would restart the conversion of uranium ore concentrate, or yellowcake, into uranium gas, a feedstock for electricity or nuclear weapons.

The head of the International Atomic Energy Agency, Mohammed El Baradei, immediately protested — pleading for time to install monitoring equipment at the Isfahan nuclear conversion facility. Iran reportedly backed down slightly, delaying work at Isfahan until "early next week."

Iran is reversing an earlier commitment to freeze uranium reprocessing while negotiating with Britain, France and Germany an end to all activities that could produce a nuclear weapon. But Tehran complained the talks were getting bogged down.

The three European countries said they will give Iran's leaders a new set of financial and security incentives next week. They also warned Iran it could face United Nations sanctions if it walks away from the talks. Ledeen said he doubt the process will succeed

"I think if you got the Europeans in a room quietly and let them whisper the truth to you they would tell you they don't see any chance of stopping iran from obtaining atomic bombs. I think they're resigned to it," he said.

"They're going to start playing hardball and it's going to be a real test of the Europeans to see if they stick to this" effort, Pollack said, adding that the Iranians will try to peel the Europeans away from the United States over the next three or four months.

The Bush administration is relying on the three European nations to offer a package that Iran will accept. German leader Gerhard Schroeder said Wednesday that he thinks it could do the trick.

"I hope very much that in the end reason will prevail," Schroeder said.