The government has told Europe and UN nuclear weapons control officials that Iran will proceed with developing nuclear weapons. The government doesn't come right out and say this, but this is what is going on. Having nuclear weapons is tremendously popular in Iran, and the government, which is run by Islamic clergy, and is otherwise unpopular with the majority of Iranians, sees developing nukes as a way to preserve their power. Moreover, having nukes will increase their international power. The clerics believe that an Israeli or American attack on the nuclear weapons development facilities will only make the government more popular. Finally, the government believes that the Europeans will back down from their threats of embargo and interruption of trade, as the Europeans have so often done in the past.