Speaking to reporters in Jerusalem, Intelligence Minister Yuval Steinitz said Tehran was "very close" to crossing the red line laid out by Israeli Prime Minister Benjamin Netanyahu last year.
But he said it was biding its time and building uranium-enrichment facilities before making the final push for weapons-grade material.
"The Iranians are getting very close now to the red line... They have close to 200 kilos -- 190 kilos -- of 20 per cent enriched uranium," Steinitz said.
"It is a matter of weeks or maybe two months to jump from 20 per cent to 90 per cent with so many centrifuges," he said.
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"What they are doing now -- instead of crossing the red line, they are widening and enlarging their capacity by putting in more centrifuges, faster centrifuges."
Iran's aim, he charged, was to build a nuclear arsenal, not just a single bomb.
Tehran's big fear was that a Western military strike could wipe out their nuclear facilities "within a few hours," he said.
"The Iranians feel very vulnerable, especially from American air operations. This is their main concern -- that if the West, if NATO, if America decide to attack them, a few hours of accurate air raids might destroy their nuclear facilities."
Israel and many Western governments suspect Iran is using its civilian nuclear programme as cover for developing a weapons capability, a charge denied by Tehran.