Interesting i thought Italian Yugoslavs disputes were laid to rest in the sixties?
Mostly they were, but Italy retained an indigenous nuclear weapons programme until (IIRR) 1975. A communist nuclear state on it's border would have weakened the influence of the anti-nuclear Communist party in this matter and strengthened the CDs; Yugoslavian weapons could not have been subject to Soviet control and the Italians may have considered they needed a non-NATO, non-US, arsenal of their own.
Now historically there were actually
two serious Yugoslavian programmes to develop nuclear weapons; the first was from the late '40s until about 1962 (and the beginnings of the NPT) and the second was much later in the 1980s, ending in 1987. Italy's serious exploration of the idea began in 1955, and was pursued more-or-less jointly with Sweden and Switzerland (both of whom continued into at least the late '60s). I can well see the Italians watching Yugoslavia develop nuclear weapons and deciding to continue it's own programme to completion, probably bringing it's partners along too. So this is likely to kill the NPT; in 1960 there were five nuclear states historically, now there could be nine and all the other potential nuclear weapon powers will be encouraged. Depending on the US administration I could see them assisting the Italian programme covertly, in an attempt to influence it.
Now while Sweden, Switzerland and Yugoslavia are NANA the fact that Italy has nuclear weapons is likely to cause a general NATO push, which is likely to persuade both the European members and the US that the MNF (which Italy was a proponent of) is a better solution.
There may well be further proliferation of nuclear weapons, and their delivery systems. Japan was studying the matter in the late '60s (quietly given the political opposition) before it decided on its current strategy. Norway, Australia, Indonesia, Brazil, Taiwan, South Korea and Iran are likely candidates to continue their historical programmes and India and Pakistan to accelerate their (Israel probably has the capability by 1965, certainly by '67). Egypt and Argentina less so.