its definitely not love. because if you really loved your fiance you wouldn't fall for another guy. true love is monogamous. so the solution is to just end the engagement and break up, tell him the truth that you have feelings for someone else and you want him to be happy.
im gonna be blunt with you though, and tell you my opinions:
#1.) the fiance's friend...do you actually trust him? is he really close to your fiance? because if he is, why would he flirt with his bro's girl (aka you?) he obviously led you on and spent time with you and made you fall for him, if he was really a good bud to your fiance, or a good person, he would keep bro code and stay the hell away from someone else's girl. if you get with him, just realize he will always have the titles of a homewrecker and unfaithful friend and an opportunist. all three are ugly things to be known by.
#2.) obviously their friendship will be ruined. you came between two bro's.
#3.) if you do get with this friend guy, do you think you will marry him or will the attraction last forever? is it just lust now, sexual tension, or is there more to it? may be the lust will fade...and you will always look back at your fiance and see what a great guy you lost...it's a possibility.
#4.) if you dump your fiance for this new friend guy...will you be okay with your now ex-fiance dating other girls and even possibly falling in love with a new girl? will you be jealous? will you try to get him back and be possessive?
these are some things you should think about. and ask yourself. only you know the answer. but either way I still think honesty is the answer here, and your fiance should know regardless. I don't think your engagement will last though. and you can't hide this forever unless you wanna go through with the marriage and set yourself up for divorce. when you fall for someone else, its a clear sign you're NOT IN LOVE, and that you are unfaithful, and the trust is broken, and its a sign of selfishness + lust + greed. I think you should break up and be honest with yourself.