And, as stalemates over both situations continue, many worry that other states may be encouraged to seek nuclear weapons of their own.
"There are two paths ahead. We urge Iran to take the positive path and to consider seriously our substantive proposals, which will bring significant benefits to Iran," British Foreign Secretary Margaret Beckett said in Vienna on June 1, as the Iran nuclear crisis reached a decisive moment.
The inability of the international community to meet the Iran and North Korea challenges is raising concerns that other states may be emboldened to pursue their own nuclear-weapons programs
The foreign ministers of the five permanent members of the UN Security Council, plus Germany, had just agreed to offer Tehran a major new package of incentives in an effort to convince it to heed UN demands to give up its uranium-enrichment program.
The incentives included assistance for Iran's nuclear energy industry and guarantees of long-term supplies of nuclear fuel.
Incentives Not Enough
That would remove the need for Iran to produce its own nuclear fuel through uranium enrichment -- a process that can also be applied to making nuclear-weapons materials.
But if the Iran nuclear crisis appeared to reach a decisive moment in June, the following months proved how difficult finally reaching a solution remains.
The Bushehr nuclear power plant, which is being built in Iran by Russian specialists (Fars file photo)
Iran responded to the offer by offering "serious" talks with the world powers.
"I see no reason for being skeptical [about the outcome of negotiations]," Iran's top nuclear negotiator, Ali Larijani, said in July. "We want to allow more time for negotiations. The negotiations could be very important for the region, and I think all matters must be discussed and all concerns must be addressed and a supportive round must be held for confidence building. And we should be able to go step by step in order to reach our goals."
But at the same time, top Iranian leaders signaled Tehran is not ready to trade away its rights under international treaties to engage in all aspects of a nuclear program -- including uranium enrichment.
And in October, Tehran announced it had activated a second string of uranium-enrichment centrifuges as it stepped up its efforts to master the difficult technology.
Earlier this month, Iranian President Mahmud Ahmadinejad warned the international community against making any decisions that would limit Tehran's nuclear ambitions.
"If you continue making efforts to halt the progress of Iran's nuclear program, and if you take any step against Iran's rights, either in propaganda or international bodies, the Iranian nation will consider this a hostile act," Ahmadinejad said.
Now, at year's end, the world powers have reached another moment for decision. Will they continue trying to negotiate with Tehran in hopes of reaching a diplomatic solution? Or will they seek punitive UN sanctions?
Predictions remain as hard as ever.
The United States -- with growing European support -- is ready to take a tougher line. But Russia and China warn that sanctions could only worsen frictions.
Pyongyang Makes A Test
Meanwhile, the crisis over North Korea's confirmed nuclear weapons program also escalated in 2006.
"I am very much proud of our scientists and researchers who have conducted such a very, very successful nuclear underground test," North Korean Ambassador to the UN Pak Gil Yon said in October after Pyongyang announced it had carried out its first nuclear test.
The test, which Pyongyang claimed was successful, elicited alarm worldwide, as it demonstrated North Korea's determination to keep developing nuclear weapons and long-range missiles, despite on-again, off-again six-party talks meant to induce Pyongyang to stop.
All five of the states negotiating with Pyongyang -- the United States, Russia, China, Japan, and South Korea -- condemned the test.
The UN Security Council slapped North Korea with trade, travel, and other sanctions as punishment.
But while the sanctions are intended to stop the flow of technology and materials that Pyongyang could use to develop its nuclear-weapons capability, it remains unclear how tightly they can be enforced.
"I think we have to react firmly. But also I believe, on the other hand, that the goal to solve this issue from a diplomatic point of view is still open," China's ambassador to the UN, Wang Guangya, said just before the sanctions were imposed in October.
Pushing For Diplomacy
Since then, China -- which is Pyongyang's closest trading partner -- has expressed concern over the UN's authorization to search all imports into North Korea to ensure there are no bomb- or missile-related items.
And Russia joined China in warning that -- while both want Pyongyang to disarm -- they also fear for regional stability if the crisis is not resolved peacefully.
That leaves the international community's greatest hope for ending the North Korea crisis back where it began before the nuclear test -- with the troubled six-party talks.
Those talks resumed in Beijing on December 18 and broke up without progress four days later.
The top U.S. diplomat to the talks, Assistant Secretary of State Christopher Hill, said on December 13 that the United States wanted to see concrete progress. He said the goal of the talks was to implement a September 2005 agreement, under which North Korea pledged to end its pursuit of nuclear technology in exchange for energy and aid.
Other Emerging Threats?
The inability of the international community to meet the Iran and North Korea challenges is raising concerns that other states may be emboldened to pursue their own nuclear-weapons programs.
Muhammad el-Baradei, head of the UN's nuclear watchdog, the International Atomic Energy Agency (IAEA), said in May that "nukes breed nukes."
El-Baradei, who won the Nobel Peace Prize last year for his efforts to stem proliferation, said that "as long as some nations continue to insist that nuclear weapons are essential to their security, other nations will want them."
The IAEA chief has long called on countries that already have nuclear weapons -- as well as those seeking them -- to give them up.
He said the continued development of nuclear weapons puts the world at risk of having 20 to 30 countries in possession of such weapons in the future.
A demonstration in support of Iran's nuclear program outside the Isfahan uranium-conversion facility in Isfahan in January (epa)
IRANIANS SPEAK OUT ON THE DISPUTE: To find out more about what Iranians think about the international controversy over their country's nuclear program, RADIO FARDA asked listeners to express their views....(more)
Iran: Public Has Mixed Feelings On Nuclear Issue
THE COMPLETE PICTURE: RFE/RL's complete coverage of controversy surrounding Iran's nuclear program.
CHRONOLOGY An annotated timeline of Iran's nuclear program.