Iran's test-firing of its ballistic missiles last Wednesday sent shock waves throughout the international community, but especially so in Israel, as Teheran made it a point to emphasise that its Shahab-3 missile - which has a range of 2,000 km - could easily strike the Jewish state.
Iran officially stated that its latest exercise was designed to show how it could retaliate against what it called an American or Israeli attack. Speculation has in fact been rife lately that Israel could soon launch an air strike against Iran's nuclear facilities, especially after it conducted military manoeuvres in the Mediterranean, which some observers believed was a dress rehearsal for a possible attack on Iran.
The test-firing of the Iranian missiles comes at a time of heightened international tensions over Iran's nuclear programme. G8 leaders in Japan expressed their 'serious concern' over Iran's failure to comply with UN Security Council resolutions, calling for a suspension of its uranium enrichment programme.
Last month the five permanent members of the UN Security Council plus Germany (5+1) offered Iran a generous package of economic aid in return for Teheran giving up its nuclear activities, but there has been no formal public response yet.
The EU's foreign policy chief, Javier Solana, is expected to visit Teheran this week to hear what the Iranians have to say about the international community's latest offer. The offer includes helping Iran build a new nuclear reactor for its energy needs and allowing Iran to continue enriching uranium for six weeks but not expanding its programme by adding new centrifuges. In return for this latter condition the Security Council would not consider increasing sanctions against Iran.
So far the Iranian government has been sending mixed signals about how to react to the international community's offer, which suggests that a debate is going on within the regime between moderate pragmatists (if any actually still exist) and hardliners led by President Mahmoud Ahmadinejad, who so far seem to have the upper hand.
Of course, there are many levels of power and authority in Iran, the most important of which is the Council of Guardians led by supreme leader Ayatollah Ali Khamenei - who does not always see eye to eye with Ahmadinejad.
Earlier comments by Ayatollah Khomeini's international affairs adviser Ali Akbar Velayati during a television interview that the package offered by the 5+1 group could be acceptable "in principle" were soon corrected to state that only negotiating with the international community was acceptable.
It is clear, therefore, that Iran is not sure how it should react to the latest offer from six world powers but it has not closed the door to negotiations and it has not rejected the offer. Iran seems to want to delay, rather than resolve the crisis, and to play for time. However, it cannot keep on postponing a decision indefinitely.
This will only lead to additional sanctions by the international community as well as unilateral action by individual countries and companies. Last week, for example, Total, the French energy group, decided not to invest in Iran's huge gas reserves, as it considered such investment far too risky, dealing a death blow to Iran's plans to significantly increase its gas exports.
Ultimately, the greatest concern is that if these negotiations with Iran continue to go nowhere, Israel will launch a military strike against Iranian nuclear facilities. Israel will attack soon if it believes Iran is close to producing a nuclear weapon.
Furthermore, the US presidential election is around the corner and Israel knows that the next US President - whether Barack Obama or John McCain - is unlikely to be as pro-Israeli as George Bush, who they believe would probably not condemn any Israeli attack. Another concern for Israel is the fact that Iran is about to acquire a new Russian anti-aircraft defence system.
While Israel's concerns over Iran's nuclear programme are understandable - Ahmadinejad has threatened Israel many times, even calling for its destruction - the consequences of an Israeli strike would be very grave indeed.
Iran would definitely retaliate against Israeli and US interests. Tel Aviv would be targeted, the Strait of Hermuz, located between Oman and Iran, where most of the West's oil passes through, would probably be closed, leading to a major economic crisis, terrorism would increase (with a possible alliance between Shi'ite Iran and Sunni Al-Qaeda), US forces in Iraq and Afghanistan would become increasingly vulnerable, Muslim public opinion would become further radicalised, and the whole region would be engulfed in turmoil.
Also, Iran's enrichment programme would at best be delayed, not destroyed for good. In a nutshell, neither the West's nor Israel's security would benefit as a result of such a military strike.
There are no easy solutions, of course, and nobody wants to see a nuclear-armed Iran. However, both the EU's and the UN's diplomatic efforts must continue - but the US must take on a much larger role, even considering opening up diplomatic channels with Teheran (unlikely under the Bush administration) or at least addressing Iran's security concerns. Iran should accept the UN's latest offer, which is both generous and reasonable, and every effort must be made to make them understand this.
Should negotiations with Iran get nowhere, the US should make it clear that any nuclear strike against Israel by Iran would result in a massive nuclear retaliatory strike against Iran. This is something that Israel would also do, but it won't say so, as it does not admit to possessing nuclear weapons.
The policy of MAD (Mutually Assured Destruction) kept the peace in the Cold War, so why not in this dispute? It is true that Israel could be knocked out before it could retaliate against a nuclear strike, but that it why it is important for the US to make its position clear.
The million dollar question is: Will Iranian fear of a US nuclear response be enough to prevent it from destroying Israel?