The British newspaper reported Israel has established a secret base in northern Iraq where it dispatches Special Forces to conduct covert operations and compile intelligence inside Iran.
The mission is to find "smoking gun" evidence that Iran's nuclear program is centered on the production of weapons, the newspaper said.
Western intelligence sources told The Times Israeli forces enter Iran disguised as Iranian soldiers and operate near a number of the country's nuclear facilities. They also measure the levels of radioactivity and magnitude of explosions from tests conducted by Iran.
The sources said Israeli forces use vehicles as well as helicopters in order to travel from place to place and that Israel has been conducting such missions for several years and has intensified efforts in recent months near the Parchin military complex near Tehran.
"We've detected clean-up efforts recently in Parchin, which might indicate that the Iranians are trying to hide evidence of warhead tests in preparation for a possible IAEA visit," an unnamed source said, referring to Iran's refusal to permit inspectors from the International Atomic Energy Agency to visit the site.
Operations have also been conducted near the Fordow uranium enrichment facility, the paper said.
There has been no Israeli response to the report.