Iran has announced plans to activate its heavy-water nuclear research complex at Arak in 2009, and phase out a similar, smaller facility in Tehran. According to the Tehran Times, the 40-megawatt Arak complex (also known as Khondab) will be used to "produce isotopes for medical, industrial and other peaceful purposes." The director of Iran's Atomic Energy Organization told the paper that the Tehran reactor will be "turned off" by the time the Arak facility becomes operational, suggesting a rapid start-up for the new heavy water plant.
And for good reason. A heavy water facility, like the one at Arak, can be used to convert uranium into weapons-grade plutonium. Activation of the Arak complex will give Iran another path for producing atomic weapons, and lessening reliance on uranium enrichment facilities. The Arak facility may not be fully operational until 2014, although that timetable may need revision, in view of Iran's plans to shut down the Tehran reactor and press ahead at the new complex.
As for those 'isotopes," Iran will probably engage in low-level production efforts at Arak, providing a convenient cover story for the facility and its operations. In reality, most of the isotopes that will be produced at Arak are readily available on the commercial market, so technically, there's no need to build a 40-megawatt reactor for that stated purpose.
Disinformation has long been a key element of Iran's nuclear programs, with Tehran offering a variety of cover stories, distortions and downright lies, all in an effort to mask its activities. A few months ago, IAEA inspectors discovered a huge tunnel at Esfahan, near a key Iranian enrichment facility. Without batting an eye, Iranian officials said the tunnel was nothing more than a storage facility, although its size and configuration suggested that it could be used for other purposes, including weapons assembly. Before that, a suspect facility in Tehran masqueraded as a "watch factory." That story didn't hold because there really isn't a watch industry per se in Iran, and "products" from that factory were never available in Iran--or anywhere else.
On a related note, the head of Iran's Revolutionary Guards claims his country can attack enemies at distances of up to 2,000 km (1,243 NM). Major General Yahya Safavi vowed that, if Iran is attacked, it will "respond beyond our borders, and will attack the military facilities of our enemy." Safavi made the comments during a visit to an Iranian missile unit near Esfahan, stating that "Iran can handle any attack."
The range cited by General Safavi is an obvious reference to Iran's medium and intermediate range missiles, the Shahab-3 and BM-25. But there are a couple of problems with his claims. First of all, the Shahab-3 (the Iranian version of a North Korean No Dong) is reliable to a range of 650-840 NM (1000-1300 km); Tehran has apparently tested extended range (ER) versions of the missile, but none of those tests have been completely successful. Iran certainly has the ability to launch a Shahab-3 ER, but there's some doubt as to whether the missile can reach a target 2000 km away, and strike it with any degree of reliability.
Regarding the BM-25, Iran reportedly acquired that missile from North Korea earlier this year. The BM-25, based on the Russian SS-N-6 SLBM system, has sufficient range and accuracy to hit Israel and even portions of southeastern Europe. However, there is no indication that the DPRK (nor Iran) have actually launched one of these missiles, suggesting that technical, maintenance or operational issues have prevented the start of flight-testing. If that assessment is accurate, then it may be several years before the BM-25 enters operational service with Iran, and actually poses a threat to distant targets.
It's worth noting that Pyongyang had an opportunity to launch a BM-25 (which they refer to as the "Musudan") during the mass missile launch on 4 July. But the DPRK took a pass, choosing instead to fire a salvo of shorter-range SCUDs and the long-range TD-2, which failed less than 45 seconds into its flight. Pyongyang's failure to include the Musudan in that firepower demonstration suggests that it, too, is having some difficulty with the system, and that the missile has not reached full operational status. Iran is believed to have helped finance the BM-25/Musudan program, which probably explains why Tehran took delivery of the system before it became fully operational.