The Bush administration signaled over the weekend that it will seek new U.N. sanctions against Iran over its suspect nuclear program.
The U.S. and five other world powers offered Iran a package of incentives if it would freeze uranium enrichment by last Saturday.
Iran ignored the informal deadline, saying it was ready for more negotiations but would not in any event halt uranium enrichment, a process that many fear could eventually give Iran what it needs for a nuclear weapon.
Nowhere is that concern felt more than in Israel, the target of frequent rhetorical broadsides from Iranian leaders who support Israel's most intractable foes, including Hamas and Hezbollah.
Israeli officials estimate that Iran will be able to process weapons-grade uranium by 2010. Deputy Prime Minister Shaul Mofaz, a former army general and defense minister, calls that "unacceptable."
"We want to make sure we're prepared for every option," Mofaz says. "We don't want war, we want peace. But we will not let that second Holocaust take place."
Israel has long joined the U.S. in hinting that a military strike against Iran is an option. A massive Israeli Air Force training exercise over the eastern Mediterranean earlier this summer was, according to analysts, clearly meant to send that message.
Israeli Foreign Minister Tzipi Livni told CNN on Sunday that diplomacy is the preferred — but not the only — pressure tactic.
"Sanctions can be effective as long as the Iranians and the entire world understand that all the options are on the table," Livni said. "This is what we need to do today. We cannot postpone it. We cannot wait for the Iranians to decide whether they are willing to talk with the international community."
Livni and Mofaz are vying to succeed Ehud Olmert as Israel's next prime minister. And both are talking tough on Iran, which plays well with the Israeli electorate. Their comments, nonetheless, underscore a fundamental belief in Jerusalem.
"The general consensus in Israel is that engagement of Iran — the general consensus is that this is the wrong way to go," says Dr. Shmuel Bar, who directs Israel's Institute for Policy and Strategy.
Bar says Iran is renowned for using diplomacy as a stall tactic.
"I don't think that anybody really does believe that there's a diplomatic solution," he says. "The Iranians are well known for attrition and wearing down their opponents with never-ending negotiations that can go on and on. This is their strategy and has been their strategy forever."
Ephraim Halevy, the former head of Israel's foreign intelligence agency, the Mossad, is one of many in Israel who stand opposed to the idea of offering new incentives to Iran in return for a freeze of its uranium-enrichment program.
Halevy, now at Hebrew University, complains that Israel has not been directly involved in the negotiations. He says the package of incentives offered to Iran by the U.S., Russia, China and leading European states poses a threat to Israel.
"The incentives are far reaching," Halevy says. "They entail upgrading the status of Iran in the region and internationally. If they accept the incentives, then Iran will be translated overnight from a country that is more or less isolated into one of the major forces in the region."
Tehran says its nuclear program is for peaceful, power generating purposes, not for weapons. But almost no one in Israel buys that.
Israel is believed to have dozens of nuclear missiles, but has never acknowledged that. Bar says Israel has every right to fear Iran's nuclear ambitions.
"Iran is a country which is openly committed to destroying Israel, is committed to performing another Holocaust," Bar says. "I think that what's happened in Israel the third generation after the Holocaust has sort of gone back to a Holocaust mentality, sense that 'yes this could happen again.' The statements coming from Iran have exacerbated that feeling."
Despite those fears, some here say there's still a chance of a diplomatic solution to the confrontation.
"Israelis are — despite their skepticism and pessimism — I think they are hoping that maybe the Americans will be able to pull the rabbit out of the hat, to put it that way," says Israeli analyst Meir Javedanfar, an Iran expert. "If the United States, through direct engagement, can stop Iran's enrichment program, I think that would get full support from Jerusalem."
But with leadership succession fights now under way in Israel and the U.S., it's not clear whether direct engagement will prevail, or how long Israel is willing to wait.
As Deputy Prime Minister Mofaz put it recently, "it's a race against time and time is winning."