The virus, dubbed "Flame," is unprecedented both in terms of its size and complexity, Moscow-based Kaspersky Lab ZAO reported, saying it possesses the ability to turn infected computers into listening devices and even suck information out from nearby cellphones.
"The complexity and functionality of the newly discovered malicious program exceed those of all other cyber menaces known to date," the company said in a blog post announcing the discovery.
The announcement sent a ripple of excitement across the computer security sector. Flame is the third major cyberweapon discovered in the past two years, and Kaspersky's conclusion that it was crafted at the behest of a national government fueled speculation that the virus could be part of an Israeli-backed campaign of electronic sabotage aimed at archrival Iran.
Some evidence suggests that the people behind Flame also helped craft Stuxnet, a notorious virus that disrupted controls of some nuclear centrifuges in Iran in 2010, according to Ilan Froimovici, the technical director at Power Communications, which represents Kaspersky in Israel.
The two codes "use the same vulnerabilities in the operating system and the computer infrastructure in order to infect the computer system. We do believe that the same programmers built the two codes," he said.
Stuxnet revolutionized the cybersecurity field because it targeted physical infrastructure rather than data, one of the first demonstrations of how savvy hackers can take control of industrial systems to wreak real-world havoc.
Unlike Stuxnet, Flame appears focused on espionage, Kaspersky said. The virus can activate a computer's audio systems to eavesdrop on Skype calls or office chatter, for example. It can also take screenshots, log keystrokes, and — in one of its more novel functions— suck data from Bluetooth-enabled cellphones.
Iran has not disclosed any data lost to the new virus, but Israel's vice-premier did little to deflect suspicion about possible Israeli involvement in the latest attack.
"Whoever sees the Iranian threat as a significant threat is likely to take various steps, including these, to hobble it," Israeli Vice Premier Moshe Yaalon told Army Radio when asked about Flame. "Israel is blessed with high technology, and we boast tools that open all sorts of opportunities for us."
Alan Woodward, a professor of computing at the University of Surrey in southern England, said that Flame was a different order of threat than run-of-the-mill cyberfraud programs.
"Most malware writers like to have tiny bits of code that kind of hide away in the dross that's on a computer," Woodward said. "Flame is 20 megabytes large. That's nearly 60 times the average size of malware samples collected by Internet security company Sophos in 2010, around the same time that Kaspersky believes Flame first started spreading.
Woodward compared the virus to a smartphone. Depending on what kind of espionage you want to carry out, "you just add apps."
He said Flame's ability to attack Bluetooth-enabled devices left near a computer attack was "very unusual."
Bluetooth is a short-range wireless communications protocol generally used for wireless headsets, in-car audio systems or file swapping between mobile phones. Woodward said that Flame can turn an infected computer into a kind of "industrial vacuum cleaner," copying data from vulnerable cellphones or other devices left near it.
"I don't believe I've seen it before," he said.
Udi Mokady, CEO of Cyber-Ark, an Israeli developer of information security, said he thought four countries, in no particular order, had the technological know-how to develop so sophisticated an electronic offensive: Israel, the U.S., China and Russia.
"It was 20 times more sophisticated than Stuxnet," with thousands of lines of code that took a large team, ample funding and months, if not years, to develop, he said. "It's a live program that communicates back to its master. It asks, where should I go? What should I do now? It's really almost like a science fiction movie."
Iran claims Stuxnet and other computer viruses have done no serious harm to Iran's nuclear or industrial facilities. It sees them as part of a campaign by Israel, the U.S. and their allies to undermine its nuclear program with tactics that include the assassination of Iranian atomic scientists.
Kaspersky said the cyber espionage worm came to its attention after the United Nations' International Telecommunication Union asked it for help in finding a piece of malware that was deleting sensitive information across the Middle East. The company stumbled across Flame when searching for that other code, it said.
The Geneva-based union didn't return emails seeking comment.
The discovery of the Flame virus comes just days after talks between Iran and six world powers in Baghdad failed to persuade Tehran to freeze uranium enrichment. A new round of talks is expected to take place in Moscow next month.
Yaalon, the Israeli vice-premier, told Army Radio on Tuesday that the talks in Iraq "yielded no significant achievement" except to let Iran buy time. He appeared to take a swipe at President Barack Obama by saying it might "even be in the interest of some players in the West to play for time."
Yaalon in the past has expressed disappointment that the U.S. has delayed plans to expand sanctions against Iran, suggesting Washington was afraid the penalties would send oil prices soaring and hurt Obama's re-election chances.
Diaa Hadid contributed to this report from Jerusalem.