The officials said the second path could complicate international efforts to negotiate with Iran's new president, Hasan Rouhani, who was sworn in Sunday in Tehran, as well as increase the possibility of an Israeli strike, The Wall Street Journal reported Monday.
The United States and Western governments had been focused mainly on Iran's program to enrich uranium, which is one way to create fissile materials necessary for nuclear weapons. Now, however, the West has grown more concerned that the Islamic republic also could use development of a heavy water nuclear reactor to produce plutonium for a bomb, the officials said.
U.S. and European officials said the Iranian government has made significant advances in construction of a heavy water reactor in Arak.
A reactor like the one under construction could use uranium fuel to produce 40 megawatts of power, the Journal said. Spent fuel from it contains plutonium, which can serve as the raw material for a bomb.
The Arak facility, when completed, could produce two nuclear bombs' worth of plutonium a year, U.S. and U.N. officials said.
Iran notified the International Atomic Energy Agency, the U.N.'s nuclear watchdog, it plans to make the reactor operational by the second half of 2014.
Israeli Prime Minister Binyamin Netanyahu repeatedly threatened to attack Iran's nuclear facilities if international diplomacy stalls. A heavy-water reactor would be an easier target than Iran's underground uranium-enrichment facilities.
"There's no question that the reactor and its heavy water are more vulnerable targets than the enrichment plants," said Gary Samore, who was President Obama's top nuclear issues adviser during his first term. "This could be another factor in Netanyahu's calculations in deciding how long to wait before launching military operations."