The Iranians haven't been entirely legal in their actions. Article III states that countries must open their nuclear-energy facilities to inspections and other safeguards. Yet the Iranians built their enrichment facility covertly and opened it only after a dissident group revealed its existence to Western intelligence agencies.
The problem here, though, is that there's nothing much the rest of the treaty's signatories can do about this violation (though inspectors are now monitoring the facility). The NPT in general has no enforcement clause.
The big powers enjoy a loophole, too: Article VI, which obligates the countries that already have nuclear weapons to reduce their own nuclear arsenals—a token of good faith to those who promise to forgo nukes altogether.
Many critics of American foreign policy note that the rest of the world can hardly be expected to observe the NPT when the United States hasn't lived up to its side of the bargain.
Yet Article VI is so loosely constructed, it's amazing that anyone ever took it seriously. It states that the five nuclear countries will "undertake to pursue negotiations in good faith on effective means relating to cessation of the nuclear arms race at an early date." Read that again closely: not a cessation to the arms race, but "meansrelating to cessation"; and not even to hold negotiations, but to "undertake to pursue negotiations."
It's worth noting that the nuclear powers, including the United States, have negotiated fairly substantial reductions in their nuclear arsenals over the decades. It is also doubtful that deeper American and Russian nuclear cuts would have kept North Korea or Iran from pursuing nuclear ambitions.
That said, it is senseless for President Bush to chide and threaten other countries for pursuing nukes at the same time that he is funding not merely the maintenance of America's nuclear arsenal but the development of a whole new generation of U.S. nuclear weapons—especially since these new weapons (for instance, low-yield nuclear bunker-busters) are developed explicitly because they're easier to use in wartime. The main goal of a non-proliferation policy is to persuade the rest of the world that nuclear weapons have no military utility, so it is counterproductive to build new nuclear weapons with enhanced military utility.
In sum, the treaty has three major loopholes: It lets countries get to the brink of nuclear weapons and then quit the treaty and build the weapons; it provides no penalties for quitting or violating the treaty; and it doesn't really require the big five to cut back on their nuclear weapons.
Can these loopholes be mended? First, a more basic question must be addressed: Why do countries want nuclear weapons in the first place? Well, some want nukes for self-defense; they're a relatively cheap way of deterring an attack. Some want them as cover for their own aggressive plans; brandishing a few nukes can discourage resistance. Some want them as a badge of prestige. Probably most nuclear-wannabes are motivated by some mix of all the above.
Another way of asking the same question: Why do most countries not want the bomb? Some possibilities: They face no serious threats. They have other means of security, either through self-protection or alliances. They harbor no aggressive ambitions. They have moral qualms about pursuing the bomb. They don't have the financial or technical prowess to build or maintain a bomb—or, if they do, their society is too open to build one covertly.
Any plan to strengthen the NPT must not only shrink the loopholes but also deal with these more basic questions—which boil down to the issue of incentives. Back in the 1970s, the bribe for signing the NPT was cheap access to nuclear energy. But this has backfired, because nuclear energy turned out not to be so cheap, and because peaceful nuclear programs have proven such a useful backdoor to developing nuclear weapons. So, the big powers need to devise another payoff involving economic aid or security guarantees. This should be Topic A at the NPT review.