The UN\'s atomic watchdog is planning to reveal evidence that Iran has been working secretly to develop a nuclear weapons capability, diplomats say. The evidence is said to include intelligence that Iran made computer models of a nuclear warhead. Iranian officials say the International Atomic Energy Agency report, due next week, is a fabrication. Israeli officials have said a military option to prevent Iran from gaining nuclear weapons is drawing nearer. Diplomats, speaking anonymously, have been briefing journalists on the IAEA\'s next quarterly report on Iran. They said the report would also include satellite images of what the IAEA believes is a large steel container used for high-explosives tests related to nuclear arms. Iran says that its nuclear programme is exclusively to generate power for civilian purposes. But the IAEA has reported for some years that there are unresolved questions about its programme and has sought clarification of Iran\'s secretive nuclear activities. Of next week\'s report, one Western diplomat told Reuters news agency: \"There are bits of it which clearly can only be for clandestine nuclear purposes. It is a compelling case.\" Iranian Foreign Minister Ali Akbar Salehi said the alleged evidence was a fabrication and part of a multi-pronged US smear campaign against his country. \'Ticking clock\' Israeli President Shimon Peres, when asked by Israeli television if \"something was bringing us closer to a military option rather than a diplomatic one\", he replied: \"I believe so.\" He continued: \"I estimate that intelligence services of all these countries are looking at the ticking clock, warning leaders that there was not much time left. \"Iran is nearing atomic weapons and in the time left we must turn to the world\'s nations and demand [they] fulfil their promise... which is not merely passing sanctions. What needs to be done must be done and there is a long list of options.\" Analysts say they believe Iran may still be several years away from having nuclear weapons.