At least if you believe [link|#|this] Master's thesis (105 page .pdf) by Mayer of the Naval Postgraduate School. I haven't read the whole thing, but it has an interesting discussion at the beginning:

This thesis addresses the interests that compel the Islamic Republic of Iran to pursue nuclear weapons. To support the broader investigation, this thesis looks at three perspectives of Iran\ufffds nuclear program, each addressing a specific level of analysis. First, I examine Iran\ufffds desired military doctrine based on propositions predicted by political realism. Second, I look at the individuals that perpetuate Iran\ufffds countervailing nuclear myths, one idealizing nuclear security, and the other nuclear insecurity. Third, I analyze Iran\ufffds bureaucratic inertia in pursuing nuclear weapons and the parochial self-interests that now dominate any discussion of whether to continue. In each analysis, I identify policy measures that target the causal motivations at that level. My motivation for examining these three levels lies in George Perkovich\ufffds observation that, \ufffdfor all its
efforts to staunch flows of nuclear technology, materiel, and know-how into Iran, the U.S. government never has publicly and objectively assessed Iranian leaders\ufffd motivations for seeking nuclear weapons and what the U.S. and others could do to remove those motivations.\ufffd4

The main political relationship I see in Iran\ufffds program follows this logic: Balance of power reasoning was the impetus for Iran\ufffds nuclear weapons program. Nuclear myth makers convinced the ruling mullahs of the nuclear solution to that threat. Bureaucratic inertia is keeping the program alive despite changes in Iran\ufffds strategic landscape.

[...]

B. EVOLUTION OF IRAN\ufffdS NUCLEAR WEAPONS PROGRAM
1. The Shah\ufffds Program

Iran\ufffds civilian nuclear energy program began while Shah Mohammed Reza Pahlavi was still in power, buying a five-megawatt research reactor from the United States in 1967. Having been one of the first to sign and ratify the NPT in 1970, the shah\ufffds nuclear energy program was supported by several Western powers. The United States, France, and West Germany all provided Iran with reactors and technical training.10 The shah\ufffds \ufffdmotives were a fusion of Iranian national ambition and concern for the direction of the neighborhood.\ufffd11 Scholars assume the shah also directed a parallel weapons program, using the openly declared civil nuclear power program as a springboard for developing weapons grade fuel and as a cover to develop the technical know-how for weapons design and manufacturing, which ended upon his overthrow in 1979. 12 Because the United States wanted the shah to rise to the role of Gulf protectorate, U.S. leaders looked the other way on Iran\ufffds early nuclear foray.

2. Rebirth after the Iran-Iraq War

After Ayatollah Khomeini\ufffds ascendance, Iran\ufffds nuclear program lay dormant until 1984, when the Islamic Republic was embroiled in its bitter war with Iraq.13 Having sustained fearsome losses, many from Iraq\ufffds use of chemical weapons (which was largely ignored by the international community), the Iranian regime was forced to find a balancing capability and nuclear (along with chemical and later, biological) weapons, appeared to be that balance.14 Because of the U.S.-led arms embargo (as a result of the revolution\ufffds takeover of the U.S. Embassy in Tehran), Iran felt isolated from the international community while Iraq enjoyed economic and military aid from Europe and the Soviet Union. According to Geoffrey Kemp, \ufffdthese memories continue to generate bitterness among Iranians\ufffd and are prime motivators in the regime\ufffds \ufffdstrong anticolonialist nationalism\ufffd as it strives for self-sufficiency in every respect, including its nuclear program.15

In 1989, Iran announced it had discovered uranium ore deposits near Saghand, and it intended to begin mining operations in 1990, followed by enrichment facility construction by 1994. In 1992, Russia announced it had signed an agreement with Iran to assist in construction of a light-water reactor in Bushehr, on the southwest coast as well as a bilateral agreement to provide nuclear fuel support.16 The international community accepted this progression of events, albeit with suspicion, based on Iran\ufffds appearance of conforming to IAEA protocols, although the United States is still pressuring Russia to abandon its assistance to the Islamic Republic.

If the light-water reactor was the limit of the Iranian program, then it may be true that Iran is only developing a nuclear power capability. The complications of reprocessing spent fuel from a light-water reactor make it unlikely that Iran would use upgraded uranium from such a process to develop nuclear weapons. In order to extract the material, the reactor must be shut down, which would be immediately noticed by IAEA and U.S. monitoring.17 It would not make sense to risk such an easy discovery for such a small yield. But the United States and others believe Iran has been pursuing nuclear weapons all along.

3. Revelations

After Washington received a tip from an Iranian opposition group about nuclear activities unknown to the United States and the IAEA, the United States released satellite photos showing two additional nuclear sites at Natanz and Arak.18 In February 2003, Iran confirmed it was building a heavy-water reactor at Arak and a uranium enrichment plant at Natanz. The disclosure also admitted Iran had imported undeclared quantities of processed uranium from China in 1992, which would put it in violation of the terms of the NPT.19 Also in February, Iranian President Khatami publicly declared that these facilities were designed to allow Iran to produce its own nuclear fuel. The complexity of the Iranian program suggests an advanced technological commitment and capability beyond civil power requirements.

The addition of a gas centrifuge enrichment plant of the size seen at Natanz plus a heavy-water reactor casts reasonable doubt on the intentions of the Iranian program. Both capabilities can produce more nuclear fuel than one commercial light-water reactor would need. IAEA environmental analysis of these centrifuges revealed the presence of enriched uranium even though Iran had claimed it had only tested the equipment with

inert gases.20 And here lies a troubling discontinuity: Iran first claimed the centrifuges were built indigenously, but then claimed the high-grade uranium contamination came from an unnamed country from which they purchased the equipment. Either Iran was upgrading uranium it claimed it didn\ufffdt have with indigenous centrifuge equipment, or, it was transferring used, undeclared nuclear technology it claimed was indigenous. With the missile technology it has received from North Korea and China, the nuclear weapons production assistance Iran appears to be getting from Pakistan (suspected supplier of the gas centrifuges) portends a nuclear weapons threat to Israel and other U.S. interests in the region within two to four years.21

This excerpt, if you accept the logic, shows that US policy on whether Iran needs power reactors has depended on who was in power. It also shows that Israel has little or nothing to do with Iran's desire.

Mayer points, among other recommendations, to the need for a regional security arrangement that would include Iran and would obviate the need for nuclear weapons. That certainly seems to be worth considering.

Cheers,
Scott.