(CNN) -- Iranian officials have been talking with the United States and other countries trying to put the brakes on Tehran's nuclear program. On Sunday, the head of Iran's Atomic Energy Organization said Iran is now producing its own yellowcake and is self-sufficient in the nuclear fuel cycle.
What is yellowcake? What does it do and why does it matter?
Yellowcake is the lifeline of any civilian and military nuclear program. The powdery, often yellow substance is uranium ore concentrate that comes from processed, mined uranium ore.
Yellowcake is used to produce enriched uranium which is the fuel for nuclear power plants that generate electricity. Uranium enriched at levels between 70 to 90% can be used to build a nuclear bomb.
Producing yellowcake is an achievement for Iran because theoretically it will now be able to bypass strict U.N. sanctions that ban Iran from importing yellowcake from other countries.
Why does Iran want nuclear power?
Iran says it has a right to have a civilian nuclear program and enrich uranium for peaceful purposes as a signatory of the Nuclear Non-Proliferation Treaty.
Those who are suspicious about Iran's nuclear program wonder why Iran needs nuclear energy when it has among the world's largest reserves of oil and natural gas. Iran says nuclear power will free up more of its oil to export and that's more money for their struggling economy.
Why did Iran announce this development Sunday?
It was no coincidence that Iran's announcement on Sunday came 24 hours before its next round of talks with the five permanent members of the U.N. Security Council and Germany, analysts say.
World powers, led by Washington, have imposed measures to weaken Iran's nuclear program. Analysts say the recent computer virus, Stuxnet, that hobbled some of Iran's nuclear facilities and the recent killing of an Iranian nuclear expert are signs that foreign governments could be using covert action to impede Iran's nuclear program.
Iran has accused the U.S. of involvement in the killing, a claim dismissed by Washington. Iran's defiant message on Sunday was, despite outside pressure, it is pressing ahead with its nuclear program.
Why is the rest of the world cautious about Iran's nuclear developments?
The U.N.'s nuclear watchdog, the IAEA, says there is no credible evidence that Iran is building a nuclear bomb but it has also reported concerns about alleged past studies by Iran on using nuclear material for weapons.
This year the IAEA reported Iran has yet to answer questions about those studies.
The U.S. and its allies say Iran's lack of transparency and its pattern of secrecy are evidence that Iran is using its nuclear program as a cover to build nuclear bombs.
Hasn't Iran been told to stop enrichment? Why has it continued?
Iranian President Mahmoud Ahmadinejad says enriching uranium for a peaceful nuclear program is an "inalienable right" that Iran doesn't plan to give up. Iranian leaders argue its hypocritical of Washington and its allies to protest Iran's right to enrich uranium when nuclear powers that are not signatories to the Nuclear Non-Proliferation Treaty, like India, Pakistan and Israel, are able to continue their nuclear programs. Israel has never admitted that it has weapons.
How worried is the international community about Sunday's development?
Both U.S. and IAEA officials say Iran's ability to produce yellowcake is not a surprise. They say they've been aware that Iran has been working to master all stages of the nuclear fuel cycle, but western officials remain concerned.
White House National Security Council spokesman Mike Hammer told CNN Iran's announcement raises more questions about Iran's intentions, "given that Iran's own supply of uranium is not enough for a peaceful nuclear energy program."
Nuclear expert David Albright told CNN the mine Iran used to produce its yellowcake is too small to produce the tons of yellowcake necessary for a nuclear energy program, but could be used for a secret nuclear weapons program.
How long before Iran will be able to produce its own nuclear material -- and potentially build a bomb?
How long it would take Iran to make a bomb is in dispute with estimates varying from one year to as many as five. Experts say Iran has yet to obtain all the building blocks of a nuclear weapon like a delivery system.
The recent diplomatic cables leaked by the WikiLeaks website show Washington and its allies are concerned Iran is secretly working on mastering all the components of a nuclear bomb, despite the Iranian denials.
In the longer term, what can the international community do?
The international community appears to be encouraged with the impact of a fourth round of economic sanctions against Iran, but so far the combination of pressure and diplomacy have failed to curb Iran's nuclear ambitions.
Western diplomats say if Iran doesn't agree to ease fears about its nuclear program, they will take tougher actions against Iran.
Analysts say the recent computer virus that infiltrated Iran's nuclear program and the assassination of one of its nuclear experts signal that pressure against Iran will include more covert acts.
Is military action likely in the immediate future?
A military attack against Iran appears unlikely anytime soon, analysts say. Attacking Iran would be costly in both money and lives.
Iran could hit back by attacking Israel and shutting down the Strait of Hormuz, through which an estimated 40% of the world's oil travels. Iran could further destabilize neighboring Iraq and Afghanistan at a time when Washington is desperately looking to establish security in both countries.
Despite the unlikelihood of a military attack, the U.S. and its allies have never taken the option off the table.