Iran has established an “operational relationship” with al-Qaida’s core leadership amid fears the terror organization is planning a spectacular attack against the West, according to a troubling new report.

Sky News reports that the attack could come in retaliation for the killing of Osama bin-Laden last year, or as retaliation for any strike against Iran’s nuclear facilities. And a likely target of the terrorist attack would be the Olympic Games to be held this summer in London.

Iran has been supplying al-Qaida with training in the use of advanced explosives, funding, and a safe haven “as part of a deal first worked out in 2009 which has now led to ‘operational capacity,’” the Sky News website disclosed.

Some Western intelligence agencies have been skeptical of an alliance between Iran and al-Qaida. But last year the Obama administration directly accused Iran of supporting the terrorist group, a report by the intelligence analysis organization LIGNET revealed in August.