In December 1953, President Eisenhower started a program with a funny name: Atoms for Peace. Under this program, the nations which joined the American coalition against the Soviet Union were given access to Uranium-235 for non-military research and power generation. Several nations were sold American-built reprocessing facilities which could operate a “nuclear fuel cycle” (extract plutonium from nuclear reactor fuel). The American establishment could turn a blind eye as and when it suited their foreign policy objectives. Until the 1980s, the Atoms for Peace program was a component of the American Cold War strategy for incentivizing friendly nations.
Iran, then under the leadership of Mohammad Reza Pahlavi (the last Shah of Iran), was a beneficiary of the Atoms for Peace program. In 1974, the USA sold two reactors and enriched uranium to Iran. In 1975, the agreement with Iran was expanded to include the option to purchase eight more reactors from the United States and sufficient amounts of uranium at a standard price. The intelligence reports of that period declared that Iran was in an early stage of developing nuclear weapons, but the deal was not annulled since the American administration had faith in the government of Mohammad Reza Pahlavi. Kissinger referred to Pahlavi as a “man of extraordinary ability and knowledge.”
The nuclear reactor that Iraq had acquired from the Soviet Union went critical in 1967. Pakistan conducted a covert nuclear underground test in the 1970s. In 1976, Kissinger accepted that the American sale of nuclear material was a disaster. In a State Department meeting, he said, “I have endorsed it, but in any region you look at, it is a fraud. We are the only country which is fanatical and unrealistic enough to do things which are contrary to our national interests.” Seeing the proliferation of nuclear material in the Middle East, Israel invested in its own nuclear program. At the time of the Yom Kippur War in 1973, Israel had thirteen nuclear devices.