Speaking in Paris, International Atomic Energy Agency (IAEA) Director-General Mohamed ElBaradei said Iran had not been installing a significant number of centrifuges, machines that enrich uranium, as quickly as it could have been.
"They haven't really been adding centrifuges, which is a good thing," ElBaradei said at a think-tank in Paris, adding: "Our assessment is that it's a political decision".
The U.N. Security Council has imposed three rounds of sanctions on Iran for failing to suspend enrichment, a process that can produce fuel for power plants or, potentially, bombs.
Major powers and ElBaradei suspect Iran is trying to develop the capacity to make nuclear weapons. Iran says it only wants to master atomic technology to meet its growing electricity needs.
In its last report on Iran in November, the IAEA said Tehran planned to start installing another 3,000 centrifuges early this year, adding to 3,800 already enriching uranium and another 2,200 being gradually introduced.
ElBaradei's comments, made two days before his next report on Iran is due to be issued, suggested that progress on installing more centrifuges at Iran's Natanz enrichment site was much slower than had been expected.
"Natanz is supposed to have 50,000 centrifuges. Right now they have 5,000," he said, adding that Iran had not added a "significant" number of centrifuges.
Iran had allowed access to nuclear sites to monitor activity there, but ElBaradei criticised Iran for its continued failure to cooperate with an IAEA probe aimed at clearing up the true nature of Iran's past nuclear work.
Various suspicious materials have been uncovered in more than five years of inspections, including a document showing how to craft uranium metal into hemispheres, which could only be used to make weapons. Iran says it never used the plan.
"No, I'm not obviously happy with the degree of cooperation ... They shut off any cooperation with the agency over the past few months," said ElBaradei, who has for years called on Iran to do more to help his agency's investigations.
"Iran right now is not providing any access or any clarification with regard to those studies or the whole possible military dimension," he added.
ElBaradei played down fears of an imminent Iranian bomb.
"They will have probably in a year or so enough low enriched uranium which, if converted to highly enriched uranium, and if they have the know-how to weaponise it and to deliver it, then they can have one nuclear weapon," he said.
But many other steps would have to be taken to produce a wepaon, such as walking out of the nuclear Non-Proliferation Treaty, expelling U.N. nuclear inspectors and mastering the technology to produce a nuclear explosion, he said.
"If I go by the intelligence comunity in the U.S., they are saying that they still have 2-5 years to be able to do that -- to develop a weapon -- which to me means that we have at least enough time for diplomacy," he said. (Editing by Richard Balmforth)