A nuclear bunker buster is a nickname for a type of missile. The actual name given to reporters was "Robust Nuclear Earth Penetrator." As far as I know, only Americans developed it, in a design contest between two groups; Lawrence Livermore National Laboratory and Los Alamos National Laboratory in New Mexico. The missile received news coverage in 2003 as the Pentagon acknowledged that they were working on them. The goal was to create a weapon that could annihilate any hardened and deeply buried targets. It will cost $15Million US to develop per year, and the preliminary work will not be done until 2005 or 2006.

The idea is a nuclear warhead that is designed to be dropped from an airplane and penetrate deep, 20 or 30 feet into the earth, and detonate at a subterranean level, hopefully delivering a nuclear weapon down into any underground bunkers beneath. Currently, the U.S. already has a nuclear bunker-buster -- known as the B61-11 -- but it was built to penetrate only soil, it cannot penetrate rock. The nuclear penetrator weapon is in the shape of a long thin cylinder with a pointed nose. Some have described the design as similar to a "freemasonry nail" in that it slams through the ground relatively unharmed and goes deep. The Pentagon says that a conventional non-nuclear missile like that would destroy a target 100 feet deep with its shock waves; a nuclear payload would go even further.

There is a plan in action to build a more powerful nuclear bunker buster with a Hydrogen Bomb payload. Livermore is modifying a B83 to accomplish the goal, and Los Alamos is modifying the B61, the current nuclear bunker-buster, to use Hydrogen bombs.

The US will not discuss who they wish to target with such a weapon, but a 2001 Pentagon report listed China, Russia, Iraq, North Korea, Iran, Libya and Syria as possible targets. The obvious use for such a weapon was to assassinate high-profile targets like Saddam Hussein, who everyone expected to be hiding in a bunker. The US did drop non-nuclear "bunker buster" bombs in an attempt to kill him and destroy his resources. The primary interest is said to be from Paul Wolfowitz and Donald Rumsfeld, rather than from US generals. Both have expressed interest in using long-range weapons and aerial strikes rather than close-combat. Military insiders say that the military really has no serious need for such a weapon.

Arms-control advocates are disturbed by such earth-penetrating nuclear weapons, saying they are unneeded and will only encourage other countries, such as North Korea or Iran, to build their own nuclear weapons. They say such weapons are unnecessary because buried bunkers can be destroyed with conventional bombs or by sending in troops to attack entrances, air shafts and communications cables. Also, such a weapon would irradiate the area, and the military would hesitate to send their soldiers in after such a nuclear blast. Also, there is a fear of WMD retaliation by the enemy if used.

Reference:
http://www.siliconvalley.com/mld/siliconvalley/5695249.htm