The disclosure Sunday by Ali Akbar Salehi, head of Iran's Atomic Energy Organization, followed the reported arrest of several alleged spies by Iranian authorities and a mysterious attack by a computer worm that caused havoc with computerized industrial equipment in Iran, reportedly including the Bushehr nuclear plant.
Salehi's remarkable admission, reported by the semiofficial Fars news agency, was a stark confirmation that Iran has been wrestling with a sustained intelligence assault on its contentious nuclear program.
The recent nuclear reverses suffered by Iran apparently have centered largely on its ability to enrich uranium, a vital process that produces weapons grade material.
In May 2009, the International Atomic Energy Agency, the U.N. watchdog, reported that Iran had 4,920 operational centrifuges which enrich the uranium. A year later, the agency said the number had fallen to 3,936, a 20 percent drop.
U.S., British and Israeli intelligence services have reportedly been waging a covert campaign to sabotage and disrupt Iran's nuclear program for several years. Alleged sabotage operations include explosions that wrecked the power supply at the enrichment center at Natanz in central Iran in 2006. Fifty centrifuges were lost and the head of Iran's nuclear agency, Gholam Reza Aghazadeh, said the equipment had been "manipulated."
Intelligence sources claim the CIA and its friends also plant faulty equipment in Iran's clandestine procurement pipeline.
In June 2008, an Iranian businessman was sentenced to death in Tehran for supplying defective equipment to the nuclear program. No details were disclosed but one official conceded immense damage had been caused.
In this, the intelligence services have been aided by the fact that Iran has to acquire most of its nuclear equipment abroad and use unscrupulous middle men to help it circumvent international sanctions.
"Western suppliers are critical," observed David Albright, president of the Institute for Science and International Security in Washington.
The Americans and their allies "all want to get companies to help them put bogus equipment into the program" that will break down later, he said.
The Financial Times reported in July that Iran "also appears to be having difficulties on other fronts." It quoted Ivan Oelrich of the Federation of American Scientists as saying the Iranian centrifuges were only working at 20 percent of efficiency.
The International Atomic Energy Agency reported recently that 4,592 centrifuges had been installed at the Natanz center but were all idle.
While it's alleged the Americans and their friends have been actively seeking to subvert the Iranian program, either through sabotage or luring Iranian scientists into defecting, Western scientists say Iranian incompetence could be behind some of the setbacks.
Iran is still using old centrifuges, largely models known as P1 and P2, which were designed by Pakistan for its clandestine nuclear arms program more than two decades ago.
"It's hardly surprising when these break down, especially given the regime's ambitions for speedy success," said Michael Adler, an expert on Iran's nuclear program at the Woodrow Wilson Center in Washington.
Iran had adamantly denied its nuclear project was being sabotaged. But Salehi's admission Western agents had been able to penetrate the program indicated Tehran was having to grapple with a major security problem.
Salehi said the West had intensified its drive "to establish contact with experts" at his agency and "lure them with promises of further study and better jobs abroad."
He claimed his security department had successfully countered these Western operations by tightening security procedures and improving privileges for nuclear scientists so they wouldn't be tempted to defect.
Access to information on "foreign purchases and commercial affairs" has been blocked and "the possibility of information leaking is almost impossible now," he declared.
One of the Iranian defectors was nuclear physicist Shahram Amiri, who reportedly fled while on a Muslim pilgrimage in Saudi Arabia in May. He apparently changed his mind and was returned to Iran in July claiming he had been abducted in a Saudi-CIA operation.
There has been speculation the Iranians planted him to learn what the Americans knew about the nuclear program.