The guest of honor was British Prime Minister Tony Blair, who maintained that some European leaders were so keen on a dialogue with Teheran that they were missing the point: Teheran's program was not threatening only Israel. It is a danger to the entire free world, they argued.

At the yearly conference organized by the International Policy Institute for Counter Terrorism in Herzliya, north of Tel Aviv, experts noted Iran was developing missiles that could reach Western Europe. With a nuclear umbrella, Iran or its proxy Hezbollah for example, could launch more daring attacks. It could use chemical or biological weapons, something it has avoided so far, warned Col. Shlomo Mofaz, a reserve officer, who recently retired from the military intelligence. Iran has sleeper cells in Europe that it could activate within a very short time, he noted.

One Israeli analyst, the head of Tel Aviv University's Jaffee Center for Strategic Studies, retired intelligence Col. Ephraim Kam, doubted Iran would attack Israel.

Its conventional capabilities are limited. Most of its aircraft are 30 to 35 years old and so are its tanks. Its Shehab missiles could inflict casualties but the Shehab is not a strategic weapon, he said.

Israel can deter Teheran with the threat of air and missile attacks. Iran believes Israel has a nuclear capability and is "very much aware of the special relationship between the United States and Israel." It must take that into account if it decides to "cross red line."

Will that change once Iran has a nuclear bomb, Kam asked? "Not very likely," he suggested.

Kam was in a minority. For most Israelis Iran's nuclear program threatens their very existence.

"As crazy at it sounds, the current regime, and President Mahmoud Ahmadinejad in particular, believes that the destruction of Israel is an attainable goal. The ayatollahs have said they are ready to pay a very heavy price in order to destroy Israel. In their thinking, the Christian West will be ready to tolerate the obliteration of the Jewish state in exchange for a long truce with the Islamic world," wrote the Director of Bar Ilan University's Begin-Sadat Center for Strategic Studies Efraim Inbar, in bitterlemons.org

A few participants in this week's conference advocated political efforts to undermine the Iranian regime. "I strongly believe the Iranian radical regime will not be able to contain the popular demand, that comes from bottom to top, to change the nature of the regime," Kam suggested.

Critics argue Iran is too close to having a bomb to be able to wait for such a development.

In bitterlemons.org Shmuel Even of the Jaffee Center probed the option of economic sanctions. They could vary from freezing financial transactions and cooperation agreements to a total economic embargo.

Iran could withstand even an embargo, for some time, but the price would be very high, Even wrote.

It exports some 2.4 million barrels of oil a day. At current prices that brings in $60 billion a year. It is $15 billion more than last year, he noted.

However, Iran must import gasoline because its refinery capacity is too small to satisfy local needs. An embargo would force it to reduce gasoline consumption by about 37 percent, Even predicted.

An economic embargo would therefore hurt its industry, reduce its national product, imports would nose dive, tens of billions of dollars would no longer reach Iran, and the government would be forced cut its budget and cancel projects.

The sanctions "Would help prevent the import of raw materials and equipment for the development of non-conventional weapons and surface-to-surface missiles and would limit Iran's ability to export weapons. Iran would also be left with far fewer resources to support terrorist organizations and finance the export of the Islamic revolution to other countries," Even added.

On the other hand, Iran provides some 3 percent of the world's oil consumption. Most oil producers "are now stretched to the limit of their production capacity" Hence, oil prices would rise, he predicted.

Would the world accept the hardship? It should, Even argued.

"A nuclear Iran could threaten the global economy even more than would sanctions. The Persian Gulf currently holds about two-thirds of the world's proven oil reserves and until some real alternative to oil is developed, the world will remain dependent on the Gulf as its main source of energy.

"Iran is known as a 'price hawk' in the oil market... (So)if and when Iran acquires nuclear weapons, it could well try to dictate new and more expensive rules for the world oil market," he predicted.

Inbar doubted economic sanctions would stop Iran.

"Islamic Iran, which seeks a nuclear bomb primarily to gain regional hegemony and oppose a Pax Americana, is ready to pay a high price for its foreign policy orientation. Actually, external pressure has been used more than once as a focal point for rallying domestic support for the embattled regime," he noted.

An Associate Professor of Political Science at Tehran University, Sadegh Zibakalam, bore that out in bitterlemons.org.

The majority of Iranians want to avoid a confrontation with the West over their country's nuclear program, "Yet at the same time they do not want the Islamic regime to abandon its nuclear program. .... The general mood among many is a solemn belief that Iran must not back down from its 'just stance,'" Zibakalam wrote.

"For many Iranians, the nuclear issue has turned into a highly charged nationalist issue: the West vs. Iran and, for quite a few, the infidels vs. Islam," he added.

With the diplomatic track almost exhausted and economic sanctions unlikely to be effective, "only military measures or an unequivocal threat to use force remain as viable options," maintained Inbar.

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