LONDON -- Western intelligence has begun to detect tension within the Iranian regime over the country’s nuclear program, officials told NBC News on Friday.

Even so, the European Union on Friday provisionally approved substantial new economic sanctions against Tehran.

The new sanctions will have to be formally approved on Monday at an EU foreign ministers' meeting in Luxembourg before coming into effect.

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The sanctions, aimed at trying to change policy in Tehran, will target areas such as shipping, banking and trade in parts that could be used to build a nuclear weapon. Measures already in place include an oil embargo that is causing serious economic woes and leading to protests on the streets.

Tehran denies its nuclear work has any military intentions and says it wants nuclear power for electricity supplies and medical needs.

Despite stalled talks between Iran and a six-country alliance of Western powers, including the United States, a Western diplomatic source said contact with Iranian officials has been sustained consistently, including during the months since the summer.

Western official: 'Tension within the Iranian regime'
The official told NBC News there are some signs of “tension within the Iranian regime” over the issue.

"We’ve picked up some small signs of wavering on the nuclear policy," the official, who did not want to be named, said. "But I don’t want to exaggerate it."

He added that so far there is “no sign Iran is prepared to move” making renewed sanctions necessary.

Any change in policy from either side is only likely to emerge after the U.S. presidential election: If Iran is prepared to negotiate, it will want to know whether it is talking to an Obama administration or a Romney administration.

The United States has so far led the way on sanctions against Iran.

Even so, in Thursday’s vice presidential debate, Republican candidate Mitt Romney’s running mate, Paul Ryan, accused the Obama administration of not doing enough. Ryan warned that Iran is “moving faster toward a nuclear weapon.”

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He warned that if Iran is able to attain nuclear weapons it could “trigger a nuclear arms race in the Middle East.”

In this assertion, Ryan appeared closer to Israeli Prime Minister Benjamin Netanyahu, who dramatically told the United Nations in September that Israel was drawing a “red line” for Iran’s nuclear program and claimed the country could be on the brink of a nuclear weapon in less than a year.

With Iran issue simmering, Israeli Prime Minister Netanyahu calls early elections

EU steps up pressure
On Friday, the Western official said the chief purpose of the sanctions is to “slow down Iran’s nuclear program” and that the aim is not to target the Iranian people.

The trade and finance measures mark a major step-up of European pressure on Tehran, amid growing concerns over its nuclear program, foundering diplomacy and threats of attack on Iranian installations by Israel.

The EU is also targeting Iran's shipping industry, in an effort to curb Tehran's ability to sell oil to obtain funds and hard currency. It banned imports of Iranian oil earlier this year.

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New measures will ban European companies from providing shipbuilding technology and oil storage capabilities, as well as flagging and classification services to Iranian tankers.

But some worry that whatever the intent, the effect is a dramatic cut in living standards for ordinary Iranians that may inflame anger against the West and fuel Iranian defiance.

In a speech broadcast on state television on Wednesday, Iran's supreme leader Ayatollah Ali Khamenei labeled the sanctions "barbaric."

Reuters contributed to this report.

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The United States, the European Union and the U.N. have imposed tough economic sanctions against Iran, blocking access to the international banking system and curbing sales of Iranian crude oil as a way to persuade Tehran to abandon its nuclear program.

As a result, Iran’s currency, the rial, is in a constant state of flux, but mostly on a downward trajectory. These days, it seems to fall in value against the dollar on an hourly basis. On Tuesday the currency hit an all-time low against the U.S. dollar, trading at 26,500 to the U.S. dollar on the open market, according to Persian-language currency tracking website Mazanex. 

“Our money is becoming more and more worthless every day,” said Sarvenas Sadi, an elderly woman doing her daily shopping in Tehran earlier this week.

She picked up a handful of limes and exclaimed, “These were 100 percent cheaper last year!”

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Asked whether she ever thought she would see the currency devalue so much, she replied, “Never! I remember before the [1979] revolution $1 was worth 70 rial, now it’s worth 26,000! Who would have ever have thought!”

Iranians feel the pain of sanctions: 'Everything has doubled in price'

Did she think things would ever balance out and the price of goods would come down to what they were before. “Unfortunately I don’t think so. The thing with Iran is that once the price of something goes up, it never comes down again.”

So what’s the solution?  “Eat less limes,” she jokingly replied. 

Manufacturing hit hard
The financial situation is affecting people from all classes. Thousands of workers have been laid off and have not been paid back wages because companies have simply run out of money. Majid, a 32-year-old mechanic who used to work for a large car company was recently laid off and is owed six months’ salary.

“They are laying off people left, right and center. I doubt there will be a company left by the New Year,” he said, giving just his first name because of the sensitivity of the issue in Iran. Persian New Year will be on March 21, 2013.

The car industry, one of the biggest manufacturing sectors in Iran and a massive employer, has been affected dramatically; Iranian media have reported a 30 to 50 percent drop in car and component production in the past six months. Iran was the 13th-largest auto maker in the world in 2011, producing 1.6 million vehicles.

The Iran Khodro Company, the country’s leading vehicle manufacturer, had become the largest vehicle manufacturer in the Middle East, Central Asia and North Africa.  The company won the annual national prize for export activities in 2006 and 2007 with Russia, Syria, Turkey, Iraq, Azerbaijan, Ukraine, Egypt, Algeria and Bulgaria among their key consumers.

But higher prices, due to the soaring costs of components as a result of the sanctions, have caused a drop in demand.

Israel's Netanyahu: Draw 'clear red line' to stop Iran from getting nuclear weapons

For instance, France's Peugeot Citroen halted shipments of vehicle kits for assembly in Iran earlier this year, saying international sanctions barring transactions with the country's banking system made it difficult to obtain sales financing.

Majid, the mechanic, said he is looking for work elsewhere but it is proving very difficult. “There are not many jobs going and it is getting me more and more depressed.”

Oil sales to travel - down
The oil sector has been hit hard too.  The Iranian Labor News Agency reported that a letter on behalf of 20,000 oil workers from across the country was sent to Labor Minister Abdolreza Sheikholeslami complaining that they had not been paid in months. The letter demanded an increase to the worker’s salaries of $120 to $285 a month, adding that at the current rate they were "way below the poverty line.” 

Mohammad Reza Bahonar, a prominent Iranian member of parliament, said oil exports in June-July had dropped to "around 800,000 barrels per day," according to a report by ISNA news agency. That’s a low not seen in more than two decades, and less than half the 2.3 million barrels per day exported just a year ago.

But Minister of Petroleum Rostam Qasemi was quoted by ISNA saying that overall oil production this year "will be the same as last year."

The strangling of the economy isn’t just affecting blue-collar workers.

Middle-class Iranians had become accustomed to foreign travel – to Dubai, a playground for Iranians only an hour and half away, Turkey, one of only a few countries that does not require visa’s for Iranians, and Thailand. But the cost of travel to any of these destinations is prohibitive to many.

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Maryam, a travel agent in Tehran who also only gave her first name, estimated that the number of travelers has been halved in a year. “The price of tickets and organized tours increased almost a hundred fold. They say that this will boost domestic holidays, but I think that is even too expensive for most people.”

This was evident to me last month flying back to Tehran from London via Dubai. Usually the flight from Dubai to Tehran is jammed, but not this time. Business and first class were full with the super-rich of Iran, but 70 percent of the plane which makes up the economy class was almost empty.

Expected to get worse
Mehdi is a young entrepreneur who imports computers and accessories who also spoke on the condition of anonymity. He said people are just not buying in Iran right now. His biggest wish was that the value of the rial would just stay fixed against dollar – even if it was at an unfavorable rate – just so consumers would know how much things would cost in a weeks’ time, a day or even in the next few hours.

While the sanctions have certainly taken a major bite out of the economy and are hurting people from all walks of life – it does not seem to be making the government authorities buckle. If anything it seems to have stiffened the government’s resolve and things are set to become even more difficult in the not too distant future.  

Britain, France and Germany are urging their European Union partners "to further step up the pressure" on Iran. Further sanctions targeting the Islamic Republic's energy, finance, trade and transportation sectors are expected to be formally adopted on Oct. 15.

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Are economic sanctions successful if the Iranian economy crashes but the regime continues developing its nuclear program? That is the dichotomy now playing out inside the Islamic state, according to new data on the Iranian economy and its nuclear program.

The latest data on the quantitative success of the sanctions comes from an economics research firm, the Rhodium Group of New York. In a paper published last week, Rhodium said that customs data from around the world show both Iranian oil exports and revenues have dropped precipitously.

“As customs data for the month of July rolls in, we’re getting a clearer picture of Iranian exports the first month after new U.S. and EU sanctions formally took effect,” states the report. “And it’s not a pretty one for Tehran.”

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Specifically, the report states that the “best guess” on Iranian oil exports in July is no greater than 940,000 barrels per day, down from 1.7 million barrels per day  in June and 2.8 million barrels a day a year ago. Oil revenue dropped even more sharply, from $9.8 billion in July 2011 to $2.9 billion a year later. The disparity between the drop in oil sales and the decline in revenues was partly attributable to tumbling oil prices; even the value China’s oil imports dropped 28 percent from June to July. 

But Trevor Houser, the author of the report and a former senior adviser to the Obama State Department, says the success of the sanctions is surprising even to those who thought them up. “The July decline in Iranian oil exports and revenue is greater than anyone imagined would occur when U.S. sanctions were signed into law at the beginning of the year,” said Houser, a partner at Rhodium Group.  

Iran's currency hits fresh low against dollar as sanctions bite

U.S. and international sanctions -- mainly imposed by the European Union -- constrain a broad range commerce with Iran. They encompass the oil embargo, restrictions on the Iranian banking sector and its ability to carry out international transactions, the importation of industrial and construction equipment, and even luxury goods.

One of the most crippling has been a ban by SWIFT, the international financial clearinghouse, on Iranian funds transfers. Officials say the SWIFT sanctions have been particularly effective in limiting Iranian imports of all sorts of goods, even food supplies. The sanctions are so broad that the U.S. Treasury Department has exhaustive documentation on what is permitted, what is not, as well as licensing requirements.

At the same time, the International Atomic Energy Agency’s quarterly report on Iran’s nuclear program shows while Iranian oil revenue was declining, there was a simultaneous and dramatic increase in the number of centrifuges at Iran’s once-secret Fordow nuclear site. Iran in fact more than doubled the number of installed centrifuges -- from 1,064 to 2,140 -- in May, the IAEA reported.

Iran test-fires missile with new guidance system

The centrifuges, which are not the latest models that Iran possesses, have not been turned on, but U.S. officials call the speedup “troubling” if not a “game changer.” The Iranians also have increased their stockpile of highly enriched uranium, indicating that they have been getting better at the enrichment process.

Finally, at a military nuclear site named Parchin, which the IAEA wants to inspect, crucial buildings had been demolished and earth removed, the IAEA reported. Western diplomats see this as part of a cover-up by Iran of illicit nuclear-linked tests.

'Economic warfare'
So while the shipping data show the sanctions are a quantitative success – causing a rapid deterioration of Iran’s oil-driven economy – the IAEA data suggest no qualitative success. Iran continues to install new centrifuges and enrich more uranium, while refusing to permit IAEA inspections of Parchin.

“The challenge is it (the embargo) doesn’t seem to have much of an impact,” on Iran’s behavior, Houser admits.

CNBC: Iran oil revenue shrinks as sanctions sting

That doesn’t mean sanctions should be abandoned, says Mark Wallace, a former U.S. ambassador to the United Nations who runs an activist group, United Against Nuclear Iran, that’s engaged in shaming Western companies into abandoning business in Iran.

"Sanctions are clearly having an impact, but we can do much more and must,” said Wallace, who advocates “economic warfare” against Iran. “Importantly, the most robust sanctions in history can only prevent Iran from going nuclear if they are part of a larger strategy that includes thoughtful military planning and rigorous diplomatic activity."

Iranians feel the pain of sanctions: 'Everything has doubled in price'

Wallace points to victories big and small. He notes that in the last few days, a Russian firm decided to stop verifying safety and environmental standards for one of Iran's biggest shipping groups, making it more difficult for it to operate internationally.

It’s not surprising that economic sanctions don’t produce an immediate effect, says David Albright, founder and president of the Institute for Science and International Security (ISIS), which monitors nuclear proliferation. They take time.

“It’s a sticky thing with sanctions,” said Albright. “Nothing happens and then suddenly something big happens. It’s hard to predict what's going to happen over next six months as the sanctions tighten.

“The other part of the story (that Iran continues to make progress on its nuclear program) is true, which is why it’s all immensely frustrating to countries. It argues that ways have to be found to delay Iran from making progress on its nuclear program, because in a sense you need more time for sanctions and that means more covert actions,” like the Stuxnet virus and attacks on Iranian scientists. The former is believed to have been a joint U.S.-Israeli sabotage operation, while the latter is said to be an Israeli secret service initiative.

Israel tells US time is running out for peaceful end to Iran nuclear dispute

Albright also says that the sanctions have to be accompanied by a threat of military action if Iran continues on what the U.S., Israel and other Western nations believe is a path to nuclear weapons.

“The part of it is that it has to be clear in Iran's mind is that the United States will strike militarily to stop them,” he said.  

Iran: 'We can manage this'
Iran’s response has been that it will never give up its “legitimate” right to develop nuclear energy, while steadfastly denying it is working on a nuclear weapons program.

Privately, Iranian officials dismiss the effect sanctions have on Iran’s nuclear policies. They say the effects of the Iran-Iraq War that ravaged the country for eight years in the 1980s -- a war in which the United States covertly supported Saddam Hussein’s regime – were far worse.

 “If we could manage that, we can manage this,” said one official, speaking with NBC News on condition of anonymity.

Asked to estimate the chances that sanctions will lead to Iran ending its uranium program, the official replied, “Zero.”

Other Iranian officials say the sanctions are part of a “secret war” led by the U.S. and Israel that also includes the assassination of Iranian nuclear scientists, infections of Iranian computer networks, drone overflights and even U.S. Special Forces insertions within Iran’s borders.

Iran: We can destroy US bases 'minutes after an attack'

In the face of such provocations, one suggested, how long can Iran decline to respond?

Reprisals could already be under way. Israel has accused Iran of planning or carrying out recent attacks on its diplomatic personnel in Azerbaijan, India and Thailand, as well as orchestrating a bombing that killed four Israeli students on vacation in Bulgaria.

The Iranians strongly deny any role in those plots.

Robert Windrem is a senior investigative producer for NBC News.

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LONDON -- A South African telecom giant plotted to procure embargoed U.S. technology products for an Iranian subsidiary through outside vendors to circumvent American sanctions on the Islamic Republic, according to internal documents seen by Reuters.

The fresh revelations about MTN Group, buttressed by interviews with people familiar with the procurement, come as the South African multinational faces fights on several fronts over its lucrative but controversial Iranian venture, a fast-growing telecom.

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MTN is in talks with the U.S. Treasury in an effort to win permission to repatriate millions of dollars of profit now bottled up in Iran by American sanctions on the Iranian financial system. MTN's chief executive disclosed the talks with U.S. officials this month, saying, "U.S. sanctions should not have unintended consequences for non-U.S. companies." An elite South African police unit is investigating how MTN obtained the Iranian telecom's license, following corruption allegations made by a Turkish rival in a U.S. federal lawsuit.

Johannesburg-based MTN Group is Africa's largest telecom carrier, with operations in more than 20 countries. It owns 49 percent of MTN Irancell, a joint venture with a consortium controlled by the Iranian government. The South African company provided the initial funding for the venture and oversaw the telecom's launch in 2006.

Hundreds of pages of internal documents reviewed by Reuters show that MTN employees created presentations for meetings and wrote reports that openly discussed circumventing U.S. sanctions to source American tech equipment for MTN Irancell. The documents also address the potential consequences of getting caught. The sanctions are intended to curb Iran's nuclear program, which Tehran maintains is peaceful.

The equipment included products from Sun Microsystems Inc, Oracle Corp, International Business Machines Corp, EMC Corp, Hewlett Packard Co and Cisco Systems Inc, and was used to provide such services as wiretapping, voice mail and text messaging, the documents show.

In a statement, MTN denied any wrongdoing. The U.S. companies have said they were not aware MTN Irancell had acquired their products, and several are investigating the matter. U.S. Treasury officials declined to comment.

‘It all showed up’
Reuters first reported in June that MTN Irancell had procured U.S. equipment through a network of tech companies in Iran and the Middle East. The article quoted Chris Kilowan, MTN's top executive in Iran from 2004 to 2007, saying that the South African company was directly involved in obtaining U.S. parts for the Iranian telecom.

The new documents provide a much deeper understanding of the extent of MTN's procurement of embargoed U.S. goods, exposing new links in the supply chain of products worth millions of dollars. They also give a rare inside look at the thinking of a multinational doing business in Iran and the difficult choices involved. The documents show that MTN was well aware of the U.S. sanctions, wrestled with how to deal with them and ultimately decided to circumvent them by relying on Middle Eastern firms inside and outside Iran.

MTN was not alone. In recent months, new evidence has emerged that other foreign companies, including Britain's Standard Chartered bank and China's ZTE Corp, have helped Iran undermine increasingly tougher sanctions. The bank, which agreed to pay $340 million to New York's bank regulator to settle allegations it hid transactions with Iran, still faces a separate U.S. probe. ZTE is the subject of investigations by the Federal Bureau of Investigation and the Commerce Department after Reuters reported it had supplied U.S. equipment to Iran's largest telecom.

The new MTN documents appear to detail an intentional effort to evade sanctions. For example, a January 2006 PowerPoint presentation prepared for the project steering committee -- comprised of then top-level MTN executives -- includes a slide titled "Measures adopted to comply with/bypass US embargoes." It discussed how the company had decided to outsource Irancell's data center after receiving legal advice.

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"In the absence of applicable U.S. consents, it is a less risky route to MTN for Irancell to outsource data centre than it is to purchase restricted products," the PowerPoint slide says.

The documents also include a lengthy spreadsheet of "3rd Party" equipment dated June 2006 that lists hundreds of U.S. components -- including servers, routers, storage devices and software -- required for a variety of systems.

A delivery schedule also dated June 2006 lists U.S. equipment needed for "value-added services," including voice mail and a wiretapping system. The schedule states that the equipment would be "Ready to Ship Dubai" that July and August. It estimates it would take two weeks to arrive in the southern Iranian port of Bandar Abbas by "Air or Sea/Road," and then up to 30 days to clear Iranian customs.

According to a person familiar with the matter, the equipment ultimately arrived by boat. "It all showed up," this person said.

‘Outstanding issues’
Reuters reported in June that a Kuwait-based telecom-service provider called Shabakkat was used to procure some U.S. equipment for MTN Irancell. Shabakkat's former country manager in Iran said the products were purchased from a local Iranian company.

But the person familiar with the matter said Shabakkat also sourced U.S. products from a distributor in Dubai called Exit40. The distributor no longer operates.

A Shabakkat executive in Kuwait did not respond to requests for comment. Two former top executives of Exit40 could not be reached for comment.

The documents suggest procuring the U.S. parts often wasn't easy, and the process was plagued by delays. For example, a "High Level Weekly Report" in November 2006 discusses problems sourcing Sun hardware.

"Urgent decision required to source SUN machines through local supplier," it states. A note in red at the bottom of another PowerPoint slide says: "According to Shabakkat, all SUN HW is at Dubai waiting for Payment." HW stands for hardware.

The following month, a spreadsheet detailing "Outstanding issues" cites delays in deploying a system called USSD that enables interactive services. "The USSD platform is completely built on SUN hardware - hence until the SUN hardware is delivered by Shabakkat USSD implementation will be delayed," the spreadsheet says.

Paul Norman, MTN Group's chief human resources and corporate affairs officer, said in a statement to Reuters: "MTN denies that it has ever conspired with suppliers to evade applicable U.S. sanctions on Iran or had a policy to do so. MTN works with reputable international suppliers. Our equipment is purchased from turnkey vendors and all our vendors are required to comply with U.S. and E.U. sanctions. We have checked vendor compliance procedures and continue to monitor them and we are confident they are robust."

The Hawks, a South African police unit, is investigating MTN over allegations contained in a federal lawsuit filed in Washington in March by Turkcell, an Istanbul-based rival. The suit alleges that MTN stole the Iranian telecom license from Turkcell in November 2005 by paying bribes. MTN denies the allegations and has attacked the credibility of former MTN executive Kilowan, who is Turkcell's key witness in the case. The procurement of banned U.S. products is not a subject of the lawsuit.

‘Civil and criminal consequences’
According to the internal procurement documents, right from the start MTN was well aware of what it termed "embargo issues" and the inherent risks involved.

A December 2005 PowerPoint presentation marked confidential and emblazoned with MTN's logo noted that the "Consequences of non compliance" included "Civil and criminal consequences." The PowerPoint slide added that the U.S. government could blacklist MTN, "which could result in all MTN operations being precluded from sourcing products/services from U.S. based companies in future."

According to a person familiar with the matter, MTN was determined that MTN Irancell procure substantial amounts of U.S. equipment: The U.S. products had performed well in its other networks, and the company's technicians were familiar with them. But MTN soon learned that its major contractors on the project -- particularly Nokia -- wouldn't provide the equipment because of the U.S. embargo.

So MTN executives began to explore ways to procure the parts without violating sanctions, the documents show. The company initially explored an exception to the sanctions known as the "de minimis" rule. Under it, tech products can sometimes be legally exported to Iran from a foreign country if the aggregate value of the U.S. parts or technology inside is less than 10 percent.

According to the person familiar with the matter, MTN believed that if U.S. components comprised less than 10 percent of a large system, its major contractors could legally procure them. But the company learned that the rule applies to each component, not to an overall system.

"Once they figured it out, they realized the vendors wouldn't accept that," this person said. "Now they had a problem."

According to a weekly report from December 2005, MTN also explored another alternative -- obtaining U.S. parts from the so-called "grey market," or unauthorized distribution channels. The report suggests "obtaining go ahead to procure US embargoed products ... from grey market notwithstanding the adverse consequences to MTN."

The person familiar with the situation said MTN was under tremendous pressure to launch the Iranian mobile operator as quickly as possible, because it had told shareholders it projected having 1 million subscribers by the end of 2006. The operator finally launched in October, after months of delays, and is now Iran's second-largest wireless carrier by subscribers.

The procurement problems are referenced in numerous internal MTN and MTN Irancell documents. A June 2006 status report discussed delays in the delivery of essential components for value-added services, or VAS.

"The primary challenge in the establishment of the VAS solution is simply that the hardware platforms required are of US origin and therefore fall foul of the US embargo on exports to Iran," the report says. "This means that innovative mechanisms need to be applied to secure delivery of the hardware platforms." Another progress report makes reference to an "Order placed last week with Turkey and Iran to circumvent embargo issues."

Reuters reported in June that some of the U.S. equipment -- including at least a half-dozen Sun servers --was sourced locally through Iranian companies. But according to the person familiar with the matter, many other U.S. components were acquired via Dubai by Shabakkat, which was paid about $30 million to $40 million to acquire them -- about twice their value.

"You had a buyer who was desperate," the person said, referring to MTN. "They didn't have any other options."

Mahmoud Tadjallimehr became a project manager for Nokia on the MTN Irancell project in November 2006. In an interview, he said it was known within the mobile operator that Shabakkat was sourcing U.S. equipment for the project, and he dealt directly with the firm. But he said that one day in discussing a delivery problem, a Shabakkat manager told him, "The issue was not with Shabakkat but with Exit40." He also said "someone told me that we should never use this name (Exit40) in any kind of emails or conversations."

According to archive.org, which archives websites, Exit40's site in 2006 described the firm as a privately held, "leading independent wholesale distributor of IT products" that was headquartered in Switzerland, with offices in Dubai, Florida, Switzerland and India. The site also included this boast: "Exit40's procurement executives source hard to find or locally constrained products for customers."

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The United Nations' nuclear inspection agency, the IAEA, is about to issue a report finding that Iran has made significant progress on installing hundreds of new uranium-enriching centrifuges, a senior administration official told NBC News on Friday. 

The New York Times reported earlier that U.N. inspectors would issue a report indicating that Iran had recently installed upward of 1,000 new centrifuges. The article went on to say that, according to diplomats and experts, Tehran could be speeding up its production of nuclear fuel while talks with the United States and its allies had ground nearly to a halt. 

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The senior U.S. official, who spoke with NBC News on condition of anonymity, said most of the new equipment has been installed underground in Iran’s Qum nuclear facility. 

While declining to discuss specific details in the International Atomic Energy Agency report, the official said it will also deal with the fact that Iran is focusing on enriching nuclear fuel to the dangerous 20 percent level, capable of being used in nuclear bomb production. But the report will not conclude that Iran has made the political decision to build a bomb, the official said. 

In a related development on Friday, the Institute for Science and International Security released satellite imagery that it says shows apparent cleanup activities at the Parchin site in Iran, which is suspected of being used for explosive experiments related to the development of nuclear weapons.

An accompanying ISIS report, written by David Albright and Robert Avagyan, indicated that after "considerable sanitization and earth displacement activity" at the site earlier in the month, a photo taken on Aug. 15 shows several buildings at the site have now been wrapped "with scaffolding and tarpaulin, hiding any sanitization or other activity there from satellite cameras."

"Depending on how effective of a seal the tarp provides, the goal could be continue sanitizing the inside and outside of the building that is suspected to contain particles indicative of nuclear weapons development work," it said. "Alternatively tarps could provide a cover for the demolition of the buildings, or portions of them, while also containing the spread of potentially contaminated debris."

Iran has thus far refused to give IAEA inspectors access to the Parchin site.

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While both U.S. and Israeli officials are concerned about Iran's continued nuclear work, they do not agree on how near Tehran might be to building a nuclear weapon. 

Tommy Veitor, a spokesman for the U.S. National Security Council, said Friday that financial sanctions imposed on Iran are working, despite Iran’s continued progress on its nuclear program, but need more time. 

"I can't get into the specifics of the report,” he said, “but it's no surprise that Iran is continuing to violate its international obligations. 

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“That's why the president has led an unprecedented effort to increase the pressure on Iran to live up to its international obligations. Because of the president's leadership, Iran is under greater pressure than ever before. Just last month (Iranian) President (Mahmoud) Ahmadinejad said they are facing ’the most severe and strictest sanctions ever imposed on a country.’ We continue to believe that there is time and space for our current approach of diplomacy paired with unrelenting pressure to achieve our shared objective - preventing Iran from acquiring a nuclear weapon.” 

Another senior U.S. official, who also spoke on condition of anonymity, said that while the Obama administration is “very concerned by Iran's ongoing nuclear activities,” the new centrifuges do not “change significantly the amount of time Iran would need to break out” and build a nuclear weapon. 

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But as Israel's Ambassador Michael Oren said last week on “The Andrea Mitchell Report” on MSNBC and in a recent Wall Street Journal column, Israel does not agree with the U.S. on the timeline.  Israeli officials have argued that time is running out before Iran reaches the point of no return.

There is some ambiguity, however, about how much of Israel's warnings are saber rattling intended to frighten Iran. 

NBC's Andrea Mitchell and Robert Windrem contributed to this report.

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The United States on Thursday gave China and Singapore six-month reprieves from sanctions over importing Iranian oil.

Secretary of State Hillary Rodham Clinton commended the two Asian countries for "significantly" reducing the oil purchases. Eighteen other governments have received similar waivers designed to pressure Iran to curb its nuclear program by choking off its oil revenues.

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The West believes Iran aims to develop nuclear weapons. Tehran says its nuclear activities are solely for peaceful purposes such as generating electricity and medical isotopes.

Reductions by all 20 countries showed that Iran was paying a high price for its nuclear program, Clinton said.

"Their cumulative actions are a clear demonstration to Iran's government that Iran's continued violation of its international nuclear obligations carries an enormous economic cost," Clinton said in a statement.

“According to the International Energy Agency (IEA), Iran's crude oil exports in 2011 were approximately 2.5 million barrels per day, and have dropped to roughly 1.5 million barrels per day, which in real terms means almost $8 billion in lost revenues every quarter,” she said. “When the European Union oil embargo goes into effect July 1, Iran's leaders will understand even more fully the urgency of the choice they face and the unity of the international community.”

Belgium, Britain, the Czech Republic, France, Germany, Greece, India, Malaysia, Italy, Japan, the Netherlands, Poland, South Africa, South Korea, Spain, Sri Lanka, Taiwan and Turkey earlier received waivers.

The latest waivers came as an American deadline arrived for banks to stop processing petroleum transactions with Tehran.

China buys up to a fifth of Iran's oil exports and Singapore buys Iranian fuel oil.

The Republican chairwoman of the House Foreign Affairs Committee said the Obama administration was giving Beijing a "free pass."

"The administration likes to pat itself on the back for supposedly being strong on Iran sanctions," said Rep. Ileana Ros-Lehtinen, of Florida. "But actions speak louder than words, and today the administration has granted a free pass to Iran's biggest enabler, China, which purchases more Iranian crude than any other country."

Technical talks over Iran’s nuclear program resume in Turkey next week.

This article includes reporting by Reuters and The Associated Press. 

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The United States, the European Union and the U.N. have imposed tough economic sanctions against Iran –- blocking access to the international banking system and hurting sales of Iranian crude oil -– as a way to persuade Tehran to abandon its nuclear program. 

In the short term, the harsh sanctions have had an impact on Iran’s economy -– inflation has gone through the roof, and the unemployment rate is staggering, especially among young Iranians. Prices of consumer goods have doubled, tripled, even quadrupled in some cases, according to consumers. 

The business community is in disarray, and as things keep getting worse, it’s all people are talking about.

---

Barely getting by 
At the Tajrish Bazaar in North Tehran on a recent afternoon, Ahmed, a 31-year-old unemployed man, poured his heart out to me. Speaking on the condition of anonymity, as all those interviewed for this story did because of the political sensitivity of speaking out in Iran, he told me his story. 

He said he has been unemployed for the past year, doing odd jobs, and that he barely makes enough to feed himself, let alone his wife and children. The lack of jobs and the extraordinary rise in food prices have hamstrung him. But he was most worried about what the crippled economy is doing to the youth of Iran, who he said are turning to crime and drugs if they can’t find work. 

In Iran, appearance is everything. How you dress and wear your beard says a lot about your politics. 

As I talked to Ahmed, who was dressed in Western-style clothes, another man looked on disapprovingly. He had a full dark black beard and was dressed in conservative black clothes. He was listening to everything Ahmed said and wanted to talk to us, although he declined to give us his name.

He said that people like Ahmed were making excuses and were lazy. He argued that the economy had become tougher, but no more so than the Iranian people were used to over the years. He blamed the U.S. for the bad economy, accusing President Barack Obama of unfairly trying to squeeze Iran. But he said that in the end, the rough economic times had taught Iran to be more self-reliant. 

“We need to tighten our belts for now and weather this storm with the West as we have always done. And we will be victorious again,” he said.

New sanctions' real impact
The most recent international sanctions have targeted Iran’s crude oil and banking sectors. In addition to harsh U.S. measures, 27 countries in the European Union agreed in January to ban Iranian oil imports –- giving countries until July 1 to terminate their deals. They also put a freeze on assets belonging to the Central Bank of Iran and a ban on trade in gold and other precious metals.  

Anthony Cordesman, who holds the Burke chair in strategy at the Center for Strategic and International Studies and is a long-time Iran watcher, said that despite years of sanctions against Iran, the most recent ones have had the greatest impact –- partly because they target banking.

The banking sanctions “have had the most popular, or broad, impact. Right now Iran can’t even operate on the international clearinghouse.”   

“I think that this is the first time that sanctions have really had a major bite. Up to now, they have all been fairly limited,” said Cordesman.  “But beginning in November, and it’s just beginning to bite, you can’t bank internationally effectively, you can’t move money. You don’t have a stable conversion rate –- but the rial [Iran’s currency] is way down, so your savings are of very uncertain value unless you’ve invested in property.  You don’t know what’s going to happen to your business. You have to be very cautious about how much money you can spend on a marriage for your children or their education.” 

He added that we really won’t begin to see the full impact of the sanctions until summer, when they have all gone into effect.  “So everyone knows it’s getting worse, but no one knows yet how serious.” 

Vali Nasr, the incoming dean at the Johns Hopkins School of Advanced International Studies, explained how these sanctions differ from 30 years of sanctions that mostly targeted imports into Iran. 

“The new set of sanctions targeting Iran’s oil industry, central bank, ability to conduct international financial transactions, are of a different nature largely because they are going after the government’s source of income –- the ability to sell oil or receive money for oil,” said Nasr. “So these have had an impact because they have caused extensive inflation inside Iran. They’ve caused the government to scrap a variety of projects, which has caused unemployment.  

“There is no doubt that economic hardship has become much more pronounced. And there is on top of that a layer of uncertainty. So there is significant economic hardship that is hitting the lower rung of society and the Iranian middle class,” said Nasr.
 
Back in Tajrish Bazaar, Roya, a well-dressed woman in her 60s wearing a Hermes scarf for a hijab and carrying a Louis Vuitton bag, explained how even she is being hit by the economic uncertainty. While she is a wealthy Iranian living in the leafy suburbs of affluent North Tehran, she said her purchasing power has been halved by the struggling economy. 

“Everything has doubled in price,” Roya said. “My son lives in Los Angeles, and it’s cheaper to go shopping there -- amazing. Things have become difficult for me even though I am among the better off Iranians. I can’t imagine how difficult it is for folks downtown.” 
When I asked her what the solution was, she replied sarcastically, “That’s for the country’s economists to figure out.”

Close to the bone
For international relations analysts, like Cordesman and Nasr, getting reliable information on what’s going on in Iran is very difficult. Both analysts said that basically all of their information on the impact of the current sanctions is anecdotal. 

“You have to rely on anecdotal information especially because the Iranian government does not have an interest in revealing how painful the sanctions are. They may admit that they are hurting, but they don’t want to put numbers out there,” said Nasr. 

But it’s not all doom and gloom for the regime. President Mahmoud Ahmadinejad often touts during public events that Iran has a record $90 billion in foreign exchange reserves, as well as untold reserves of gold, silver and precious stones. 

Even though experts estimate that Iran has seen a decline in sales of about 300, 000 barrels of oil per day as a result of the sanctions, this has been offset by a 15 percent rise in crude prices. 

And the effect and pain of sanctions have not been distributed evenly. While blue-collar workers in downtown Tehran can expect to eat meat once a month only as a treat, North Tehran is awash with Mercedes and Porsche SUVs costing as much as $500,000 after the import tax has been paid.    

Will the sanctions achieve goal?
So the question remains as to whether the sanctions will achieve their goal: curtailing Iran’s nuclear program.

“The sanctions have had an impact of getting Iran to the negotiating table. Iran came to Istanbul [the site of the latest diplomatic talks] with much more seriousness than in the past,” said Nasr. 

But he added that the sanctions alone won’t be enough for Iran’s leaders to give up a program they have invested heavily in –- both financially and in terms of building the nuclear program as a point of national pride.  “Just because the Iranian public dislikes this regime –- that does not mean that they dislike the nuclear program. They don’t see this as the regime’s nuclear program, they see it as Iran’s nuclear program,” said Nasr.  

In order for the sanctions to work, Nasr explained, the U.S. and other parties at the table need to give something back -– otherwise it would just seem like Iran is surrendering to the West’s demands, not an easy sell at home. 

“Until now, the whole approach has been stick-heavy and carrot-poor. And the sticks are very explicit and the carrots are vague. And maybe that was necessary to get their attention and to show that we meant business. But now going forward -– [the U.S.] can’t ask [Iran] for concrete concessions –- like stop this, stop that -– but not put concrete things on the table, like this sanction will be lifted.  If all the concessions are on the Iranian side and what they get is just a promissory note, I don’t think it will fly.”   

“End of the day, these two countries have not had a single thing they’ve agreed on or done together in the last 30 years. So you couldn’t expect them to actually be able to conclude a deal without some sort of reciprocal, trust-building, concrete steps going forward.”

Msnbc.com’s Petra Cahill contributed to this report. 

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WASHINGTON -- The White House said Friday that the United States would implement tough new sanctions aimed at squeezing Iran's oil exports after President Barack Obama determined there is enough crude on world markets to take the step without harming U.S. allies.

Obama's move allows the U.S. to go forward with sanctions on foreign banks that continue to purchase oil from Iran. The sanctions aim to further isolate Iran's central bank, which processes nearly all of the Islamic Republic's oil purchases, from the global economy.

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U.S. officials hope ratcheting up economic pressure will both push Iran to abandon its disputed nuclear program and convince Israel to give sanctions time to take hold before pursuing a military strike on Iran's nuclear facilities. The U.S. and allies believe that Iran is pursuing a nuclear bomb; Iran denies that.

Under a sweeping defense bill Obama signed at the end of December, he had until Friday to determine if there was enough oil supply on the world market to allow countries to cut their oil purchases from Iran.The decision was announced in a statement Friday.

The president said he based his determination on global economic conditions, the level of spare oil capacity and increased production by some countries, among other factors. He said he would keep monitoring the global market closely to ensure it can handle a reduction of oil purchases from Iran.

The law requires the president to determine every six months whether petroleum prices are low enough and production ample enough to apply the sanctions, The New York Times said. It also allows the president to waive sanctions if they threaten national security or if gas prices increase.

The national average price of gasoline rose about half a cent to $3.93 per gallon on Friday, only about a nickel less than last year's high of $3.98 a gallon, reached in May. Analysts think pump prices will top $4 a gallon nationally within the next couple of weeks, perhaps sooner. Then they could start to fall.

Tom Kloza, chief oil analyst at Oil Price Information Service has said the average pump price could climb as high as $4.25 per gallon next month, which would top the all-time record of $4.11 per gallon set in 2008. He expects the national average to hit about $4.05 per gallon by mid-April. Whether it goes any higher, or retreats, after that is unclear, he said.

U.S. officials have sought assurances that pushing countries to stop buying from Iran would not cause a further spike in prices.

That's particularly important for Obama in an election year that has seen an increasing focus on gas prices.

The congressionally mandated sanctions target foreign financial institutions that do business with Iran's central bank — barring them from operating in the U.S. to buy or sell Iranian oil. The penalties are to take effect at the end of June, around the same time Europe's embargo on Iranian oil kicks in.

Countries can still avoid the sanctions if they take steps to significantly reduce their imports before then.

Many of the countries that buy oil from Iran are U.S. allies, including several European Union nations, Japan, South Korea and India. In order to provide flexibility to countries friendly to the U.S., the sanctions bill allows the U.S. to grant waivers to nations that significantly reduce their purchases of Iranian oil.

Even before Friday's decision, the State Department announced that it would grant waivers to 10 European Union countries and Japan because of steps they have already taken to cut back on Iranian oil. An E.U. oil embargo, approved in January, is set to take effect in July.

Sen. Bob Menendez, D-N.J., who co-authored the sanctions legislation with Republican Sen. Mark Kirk of Illinois, said he welcomed Obama's support in targeting Iran's Central Bank. Menendez's office says he was also notified of the decision earlier Friday

"Today, we put on notice all nations that continue to import petroleum or petroleum products from Iran that they have three months to significantly reduce those purchases or risk the imposition of severe sanctions on their financial institutions," Menendez said in a statement.

Msnbc.com staff contributed to this report from The Associated Press.

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TEHRAN, Iran -- Iran has halted oil shipments to Britain and France, the Oil Ministry said Sunday, in an apparent pre-emptive blow against the European Union after the bloc imposed sanctions on Iran's crucial fuel exports.

The EU imposed tough sanctions against Iran last month, which included a freeze of the country's central bank assets and an oil embargo set to begin in July. Iran's Oil Minister Rostam Qassemi had warned earlier this month that Tehran could cut off oil exports to "hostile" European nations. The 27-nation EU accounts for about 18 percent of Iran's oil exports. 

According to the BBC, Qassemi reaffirmed his stance, claiming the suspension posed no problems for Iran.

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Targeting Britain and France appeared to be a political decision by Iran to punish the two countries for supporting tougher sanctions against Iran over its disputed nuclear program.

"Crude oil exports to British and French companies have been halted," Oil Ministry spokesman Ali Reza Nikzad-Rahbar said on the ministry's website. "We have our own customers and have no problem to sell and export our crude oil to new customers."

Britain's Foreign Office declined comment, and there was no immediate response from French officials.

The European Commission said last week that the bloc would not be short of oil if Iran stopped crude exports, as they have enough in stock to meet their needs for around 120 days.

Industry sources told Reuters on Feb. 16 that Iran's top oil buyers in Europe were making substantial cuts in supply months in advance of European Union sanctions, reducing flows to the continent in March by more than a third - or over 300,000 barrels daily.

France's Total has already stopped buying Iran's crude, which is subject to fresh EU embargoes. Market sources said Royal Dutch Shell has scaled back sharply.

Greece, Turkey and Saudi Arabia
Among European nations, debt-ridden Greece is most exposed to Iranian oil disruption.

Motor Oil Hellas of Greece was thought to have cut out Iranian crude altogether and compatriot Hellenic Petroleum along with Spain's Cepsa and Repsol were curbing imports from Iran.

Iran was supplying more than 700,000 barrels per day (bpd) to the EU plus Turkey in 2011, industry sources said.

By the start of this year imports had sunk to about 650,000 bpd as some customers cut back in anticipation of an EU ban.

Saudi Arabia says it is prepared to supply extra oil either by topping up existing term contracts or by making rare spot market sales. Iran has criticized Riyadh for the offer.

Iran said the cut will have no impact on its crude sales, warning that any sanctions on its oil will raise international crude prices.

The Associated Press and Reuters contributed to this report.

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The government of Venezuela's Hugo Chavez is emerging as a rare supplier of diesel to Syria, potentially undermining Western sanctions and helping the Syrian government fuel its military in the middle of a bloody crackdown on civilian protests.

A cargo of diesel, which can be used to fuel army tanks or as heating fuel, was expected to arrive at Syria's Mediterranean port of Banias this week, according to two traders and shipping data reported by Reuters. The cargo could be worth up to $50 million.

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Chavez is a vociferous advocate of Syrian President Bashar al-Assad and Iranian President Mahmoud Ahmadinejad, who face pressure from Western sanctions. Few leaders on the world stage have polarised opinion as sharply as the Venezuelan president.

Chavez, who still defends the late Libyan leader Muammar Gaddafi, has repeatedly backed Arab leaders who have faced a year-long wave of popular protests, which have already toppled four governments.

UN sees possible crimes against humanity in Syria

Venezuelan state oil firm PDVSA shipped the cargo aboard the Negra Hipolita vessel, according to AIS tracking data on the Reuters Freight Fundamentals Database and to trade sources. The same tanker carried the first such shipment in November, the sources said.

PDVSA could not immediately be reached for comment.

"The aggressions against Syria are continuing," Chavez said in an address last month. "It's the same formula they (the West) used against Libya - inject violence, inject terrorism from abroad and later invoke the United Nations to intervene."

The South American OPEC member nation has also tried to aid Iran with fuel supplies amid sanctions over its nuclear programme.

Rights groups say close to 6,000 people have been killed in attacks by Syrian security forces against civilian demonstrators and an increasingly powerful rebel insurgency.

The United States and Europe are pressuring Assad to leave power. Russia and China this month vetoed a United Nations resolution calling on Assad to step aside.

EU threatens new sanctions on Syria

The Venezuelan tanker was last seen off the coast of Cyprus with a destination of Banias and the estimated arrival date of Wednesday, AIS ship tracking on Reuters showed. The satellite tracking has been switched off since Wednesday.

The shipment comes at a critical time for Syria, which has faced worsening energy shortages this winter after Western sanctions all but halted imports, which are needed to meet half the country's diesel demand.

Syria's oil minister spoke about a possibility of Venezuelan imports in January, and traders said the Negra Hipolita diesel shipment to Syria was the second delivery in the past three months.

The vessel can carry 47,000 tonnes, which if fully loaded would be worth around $50 million. It was not clear how much diesel the ship was carrying.

While there is no blanket embargo on supplying fuel to Syria, its state-owned oil firm Sytrol, responsible for organising fuel imports and exports, was placed on a U.S. blacklist last summer, and the EU followed suit in December.

The European Union has stopped short of banning product deliveries for humanitarian reasons, but oil traders said most deliveries have stopped anyway as traditional suppliers are increasingly reluctant to do business with Syria.

Normally an exporter of crude oil even in peacetime, Syria has relied on imports for more than half of its annual consumption of 5 million tonnes diesel because of a shortage of domestic refining capacity. International sanctions have stopped Syrian oil exports since September last year, drastically stretching government budget revenues.

Reuters and the Associated Press contributed to this report.

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