FILE- In this April, 9, 2007, file photo Iranian President Mahmoud Ahmadinejad, speaks at a ceremony in Iran's nuclear enrichment facility in Natanz, 300 kms 186 (miles) south of capital Tehran, Iran. For the first time in nearly two decades of escalating tensions over the Iranian nuclear program, it appears that world leaders are genuinely concerned that an Israeli military attack on the Islamic Republic could be imminent, an action that many fear might trigger war, terrorism and global economic havoc. (AP Photo/Hasan Sarbakhshian, File)
FILE- In this April, 9, 2007, file photo Iranian President Mahmoud Ahmadinejad, speaks at a ceremony in Iran's nuclear enrichment facility in Natanz, 300 kms 186 (miles) south of capital Tehran, Iran. For the first time in nearly two decades of escalating tensions over the Iranian nuclear program, it appears that world leaders are genuinely concerned that an Israeli military attack on the Islamic Republic could be imminent, an action that many fear might trigger war, terrorism and global economic havoc. (AP Photo/Hasan Sarbakhshian, File)
FILE- This March 14, 2007, file photo provided by the Defense Threat Reduction Agency shows crews loading a bomb, the massive ordnance penetrator, in a test at White Sands Missile Range in southern New Mexico. The conventional 30,000-pound penetrating bomb is designed to defeat deeply buried targets such as bunker and tunnel facilities. For the first time in nearly two decades of escalating tensions over the Iranian nuclear program, it appears that world leaders are genuinely concerned that an Israeli military attack on the Islamic Republic could be imminent, an action that many fear might trigger war, terrorism and global economic havoc. (AP photo/Courtesy of the Defense Threat Reduction Agency, File)
File - In this Oct. 26, 2010, file photo, a worker rides a bike in front of the reactor building of the Bushehr nuclear power plant, just outside the southern city of Bushehr, Iran. For the first time in nearly two decades of escalating tensions over the Iranian nuclear program, it appears that world leaders are genuinely concerned that an Israeli military attack on the Islamic Republic could be imminent, an action that many fear might trigger war, terrorism and global economic havoc. (AP Photo/Mehr News Agency, Majid Asgaripour, File)
FILE- In this April 8, 2008, file photo released by the Iranian President's Office, Iranian President Mahmoud Ahmadinejad, center, listens to a technician during his visit of the Natanz Uranium Enrichment Facility some 200 miles (322 kilometers) south of the capital Tehran, Iran. For the first time in nearly two decades of escalating tensions over the Iranian nuclear program, it appears that world leaders are genuinely concerned that an Israeli military attack on the Islamic Republic could be imminent, an action that many fear might trigger war, terrorism and global economic havoc. (AP Photo/Iranian Presidents office, File)
JERUSALEM (AP) ? For the first time in nearly two decades of escalating tensions over Iran's nuclear program, world leaders are genuinely concerned that an Israeli military attack on the Islamic Republic could be imminent ? an action that many fear might trigger a wider war, terrorism and global economic havoc.
High-level foreign dignitaries, including the U.N. chief and the head of the American military, have stopped in Israel in recent weeks, urging leaders to give the diplomatic process more time to work. Israel seems unmoved, and U.S. Defense Secretary Leon Panetta has reportedly concluded that an Israeli attack on Iran is likely in the coming months.
U.S. President Barack Obama said Sunday he does not think Israel has decided whether to attack Iran, telling NBC News in an interview that the United States was "going to be sure that we work in lockstep as we proceed to try to solve this ? hopefully diplomatically."
Despite harsh economic sanctions and international pressure, Iran is refusing to abandon its nuclear program, which it insists is purely civilian, and threatening Israel and the West.
It's beginning to cause jitters in world capitals and financial markets.
"Of course I worry that there will be a military conflict," Britain's deputy prime minister, Nick Clegg, said in a magazine interview last week. He said Britain was "straining every single sinew to resolve this through a combination of pressure and engagement," rather than military action.
Is Israel bluffing? Israeli leaders have been claiming Iran is pursuing nuclear weapons since the early 1990s, and defense officials have issued a series of ever-changing estimates on how close Iran is to the bomb. But the saber-rattling has become much more direct and vocal.
Prime Minister Benjamin Netanyahu frequently draws parallels between modern-day Iran and Nazi Germany on the eve of the Holocaust.
On Thursday, Defense Minister Ehud Barak claimed during a high-profile security conference that there is a "wide global understanding" that military action may be needed.
"There is no argument about the intolerable danger a nuclear Iran (would pose) to the future of the Middle East, the security of Israel and to the economic and security stability of the entire world," Barak said.
A day earlier, visiting U.N. Secretary-General Ban Ki-moon implored Israel to find a peaceful solution to the nuclear standoff.
Israel views Iran as a mortal threat, citing Iranian calls for Israel's destruction, Iran's support for anti-Israel militant groups and Iranian missile technology capable of hitting Israel.
On Friday, Iran's supreme leader, Ayatollah Ali Khamenei, called Israel a "cancerous tumor that should be cut and will be cut," and boasted of supporting any group that will challenge the Jewish state.
When faced with such threats, Israeli has a history of lashing out in the face of world opposition. That legacy that includes the game-changing 1967 Middle East war, which left Israel in control of vast Arab lands, a brazen 1981 airstrike that destroyed an unfinished Iraqi nuclear reactor, and a stealthy 2007 airstrike in Syria that is believed to have destroyed a nuclear reactor in the early stages of construction.
Armed with a fleet of ultramodern U.S.-made fighter planes and unmanned drones, and reportedly possessing intermediate-range Jericho missiles, Israel has the capability to take action against Iran too, though it would carry grave risks.
It would require flying over Jordan, Saudi Arabia, Iraq, Syria or Turkey. It is uncertain whether any of these Muslim countries would knowingly allow Israel to use their airspace.
With targets some 1,000 miles (1,600 kilometers) away, Israeli planes would likely have the complicated task of refueling in flight. Iran's antiquated air force, however, is unlikely to provide much of a challenge.
Many in the region cannot believe Israel would take such a step without a green light from the United States, its most important ally. That sense is deepened by the heightened stakes of a U.S. election year and the feeling that if Israel acts alone, the West would not escape unscathed.
The U.S. has been trying to push both sides, leading the charge for international sanctions while also pressing Israel to give the sanctions more time. In recent weeks, both the U.S. and European Union have imposed harsher sanctions on Iran's oil sector, the lifeblood of its economy, and its central bank. Israeli officials say they want the sanctions to be imposed faster and for more countries to join them.
Last week, The Associated Press reported that officials in Israel ? all of whom spoke on condition of anonymity because they were not authorized to discuss Iran ? were concerned that the measures, while welcome, were constraining Israel in its ability to act because the world expected the effort to be given a chance.
Even a limited Israeli operation could well unleash regionwide fighting. Iran could launch its Shihab 3 missiles at Israel, and have its local proxies, Hezbollah in Lebanon and Hamas in the Gaza Strip, unleash rockets. Israel's military intelligence chief, Aviv Kochavi, warned last week that Israel's enemies possess some 200,000 rockets.
While sustained rocket and missile fire would certainly make life uncomfortable in Israel, Barak himself has said he believes casualties would be low ? suggesting it would be in the hundreds.
Iran might also try to attack Western targets in the region, including the thousands of U.S. forces based in the Gulf with the 5th Fleet.
An Israeli attack might have other unintended consequences. A European diplomat based in Pakistan, permitted to speak only under condition of anonymity, said that if Israel attacks, Islamabad will have no choice but to support any Iranian retaliation. That raises the specter of putting a nuclear-armed Pakistan at odds with Israel, widely believed to have its own significant nuclear arsenal.
To some, the greatest risk is to the moribund world economy.
Analysts believe an Israeli attack would cause oil prices to spike, since global markets so far have largely dismissed the Israeli threats and not "price in" the threat. According to one poll conducted by the Rapidan Group, an energy consulting firm in Bethesda, Maryland, prices would surge by $23 a barrel. The price of oil settled Friday at $97.84 a barrel.
"Traders don't believe there's anything but bluster going on," said Robert McNally, president of Rapidan and an energy adviser to former President George W. Bush. "A potential Israeli attack on Iran is different than almost every scenario that we've seen before."
McNally said Iran could rattle oil markets by targeting oil fields in southern Iraq or export facilities in Saudi Arabia or Qatar ? and withhold sales of its own oil and natural gas from countries not boycotting.
Iran also could attempt to carry out its biggest threat: to shut the Strait of Hormuz, a strategic waterway through which a fifth of the world's oil passes. That could send oil prices soaring beyond $200 a barrel. But analysts note Iran's navy is overmatched.
If a surge in oil prices proved lasting, financial markets would probably plummet on concerns that global economic growth would slow and on the fear that any conflict could worsen and spread.
For the U.S. economy, higher gasoline prices would likely result in lower consumer spending, which accounts for 70 percent of U.S. economic activity. That could have devastating consequences for an incumbent president seeking re-election.
Nick Witney, former head of the EU's European Defense Agency, said "the political and economic consequences of an Israeli attack would be catastrophic for Europe" since the likely spike in the price of oil alone "could push the entire EU, including Germany, into recession."
He said this could lead to "messy defaults" by countries like Greece and Italy, and possibly cause a collapse of the already-wobbly euro. Witney, a senior fellow at the European Council on Foreign Relations, added that "the Iranians would probably retaliate against European interests in the region, and conceivably more directly with terrorism aimed at Western countries and societies."
Oil disruptions or higher oil prices will also dent growth in Asia. China, India, South Korea and Japan all buy substantial amounts of Iranian crude and could face temporary shortages.
China's fast-growing economy, which gets 11 percent of its oil from Iran, has urged all sides to avoid disrupting supplies. Any impact on China's economy, the world's second-largest, could send out global shockwaves if it dented Chinese demand for industrial components and raw materials.
Why is the issue coming to a head with such unfortunate timing, with the U.S. election looming and the global economy hanging by a razor's edge?
The urgency is fueled by a belief in Israel that Iran is moving centrifuges and key installations deep underground by the summer ? combined with doubts about whether either Israel or the United States have the bunker-busting capacity to act effectively thereafter.
At last week's security conference, Vice Premier Moshe Yaalon, a former military chief, said all of Iran's nuclear installations are still vulnerable to military strikes. In a startling threat, he appeared to contradict assessments of foreign experts and Israeli defense officials that it would be difficult to strike sensitive Iranian nuclear targets hidden deep underground.
American officials acknowledge the current version of its bunker-buster bombs ? considered the largest non-nuclear bomb in the U.S. arsenal ? may not be able to penetrate Iran's heavily fortified underground facilities. The Pentagon is asking Congress to reprogram about $82 million in order to make the 30,000-pound bunker-buster bomb more capable.
But U.S. officials also say there are a number of ways to cripple or disable the sites, such as targeting entrance and exit routes to an underground facility, rendering it inaccessible.
Israeli officials at the conference asserted that Iran has already produced enough enriched uranium to eventually build four rudimentary nuclear bombs and ? in what would be a new twist ? was even developing missiles capable of reaching the U.S.
Amos Yadlin, the former head of Israel's military intelligence, said the world needed less discussion on the issue. "There is the danger that an escalation could get out of control," he said. "Israel should go back to what it does best: Shut up."
___
David Stringer in London, Slobodan Lekic in Brussels, Brian Murphy in Dubai, United Arab Emirates, Lolita Baldor in Washington, Business Writer Joe McDonald in Beijing, and Energy Writer Jonathan Fahey and Business Writer Pallavi Gogoi in New York contributed to this report.
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