Iran Nuclear Deal Leaves Israel Odd Man Out With Few Options

Nov. 25 (Bloomberg) -- Bloomberg chief Washington correspondent Peter Cook explains the details of the nuclear accord reached by world leaders with Iran to limit its nuclear program in exchange for reduced sanctions. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

Israeli Prime Minister Benjamin Netanyahu pushed the world for years to limit Iran’s nuclear program. After rejecting a deal designed to do just that, he finds himself the odd man out with his own options, including military action, limited.

Government officials and analysts said Israel may now try to influence the shape of any final accord, and won’t seek to hit Iranian facilities. Iran has accused Israel of killing scientists in its nuclear and missile programs, and covert operations may be more likely than an attack, analysts said.

Israel’s rejection of the accord reached in Geneva by Iran and six leading nations over the weekend was swift. The agreement is a “historic mistake” that leaves the world “a much more dangerous place, because the most dangerous regime in the world has taken a significant step toward attaining the most dangerous weapon,” Netanyahu said.

The first accord since the Iranian nuclear program came under international scrutiny in 2003 eases sanctions on Iran in return for concessions on its atomic work. Its six-month timetable is meant to give negotiators time to seek a comprehensive deal to halt Iranian nuclear work that they, like Israel, think is a cover to build weapons.

Photographer: Abir Sultan/Pool via Getty Images

Israeli Prime Minister Benjamin Netanyahu said yesterday Israel is “not bound” by the Geneva agreement and his nation “has the right and obligation to defend itself, by itself, against any threat.” Close

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Photographer: Abir Sultan/Pool via Getty Images

Israeli Prime Minister Benjamin Netanyahu said yesterday Israel is “not bound” by the Geneva agreement and his nation “has the right and obligation to defend itself, by itself, against any threat.”

“We have to get ready for the real battle, which is how the final agreement will look,” Deputy Foreign Minister Zeev Elkin said in an interview with Israel Radio. The challenge will be “to see where the red lines are.”

Existential Threat

Israeli officials have rejected Iran’s insistence that its nuclear work is peaceful. They have repeatedly said it poses an existential threat to the Jewish state and that all options are on the table to stop it, including military action.

Netanyahu said yesterday Israel is “not bound” by the Geneva agreement and his nation “has the right and obligation to defend itself, by itself, against any threat.” The military option still exists, Elkin told Israel Radio.

What the Deal Means for the Next Six Months

The use of force isn’t seen as likely within the life of the deal, said Uzi Eilam, former director-general of the Israeli Atomic Energy Commission.

“This agreement will not allow Israel, or anyone, to utilize the military option over the six next months, or at least until the interim period is over and we know if a final deal is possible,” said Eilam, now a research fellow at the Institute for National Security Studies at Tel Aviv University.

Tough Deal

“What Israel can do during this period is push the international community toward making the final deal as tough as it can, though it should do so far more quietly than it has in the past,” said Eilam, a retired brigadier-general.

U.S. Secretary of State John Kerry told CBS News in Geneva that the agreement doesn’t take the threat of force off the table and rejected Israel’s position, articulated yesterday by Defense Minister Moshe Ya’alon, that the U.S. capitulated to Iranian deceit.

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The agreement is “not based on trust. It’s based on verification,” with mechanisms in place to confirm whether Iran is in compliance, he said.

He told CNN television’s “State of the Union” news show that the agreement makes Israel safer because the Iranian nuclear program “is actually set backwards and is actually locked into place in critical places.”

President Barack Obama sought to sooth differences with Israel in a phone call yesterday with Netanyahu. “The president underscored that the United States will remain firm in our commitment to Israel, which has good reason to be skeptical about Iran’s intentions,” said Josh Earnest, a White House spokesman.

Reduced Risk

Israeli markets saw a reduced risk of an Israeli use of force, with the benchmark TA-25 Index closing yesterday up by 0.6 percent to 1,352.96, the highest level on record. The index was little changed at 1,354.47 at 2:56 p.m. today.

“The big fear of foreign investors was that there would be a regional flameup, and the Iran deal takes that out of the equation,” Hadar Oshrat, head of Israel equity sales and trading at Deutsche Bank AG in Tel Aviv, said in an interview. “The deal eliminates the geopolitical threat of a regional conflict, which will make it easier for foreign investors to focus on economic fundamentals and see Israel as an investment alternative.”

Israeli officials contend the agreement buttresses Iranian actions against Israeli targets across the globe, including attacks on diplomats and tourists over the past two years. Iran, denying its role in those incidents, has accused Israel of assassinating several scientists connected with its nuclear and missile programs.

Covert Operations

“Covert operations are in another sphere altogether from military action, and it’s very possible such operations will continue,” said Jonathan Spyer, a political scientist at the Interdisciplinary Center Herzliya. “I don’t think anyone believes such acts are by themselves a solution to the Iranian problem, or even significantly slows down their nuclear program.”

Justice Minister Tzipi Livni, who also oversees peace negotiations with the Palestinians, said in an interview with Army Radio that Israel should look “to forge a diplomatic front with other countries, including Arab states that see Iran as a nuclear threat.”

Netanyahu, who has made warning the world about Iran’s nuclear program the cornerstone of his foreign policy, has criticized the U.S.-led effort to reach an agreement with Iran, unlike Gulf states that have expressed their reservations more quietly. Some in Israel -- and even within the coalition itself -- questioned their government’s tactics.

World’s Attention

“We must regain the world’s ear and restore our intimate relationship with the U.S.,” Finance Minister Yair Lapid said in an e-mailed statement.

Israel wanted world powers to oblige Iran to stop enriching uranium and dismantle an unfinished heavy water reactor at Arak that could eventually produce plutonium. The Geneva agreement limits uranium enrichment under close monitoring and halts any further development at Arak.

Former Israeli defense minister and military chief Shaul Mofaz, now part of the parliamentary opposition to Netanyahu’s ruling coalition, said Israeli scolding wasn’t effective because it didn’t block the deal.

“What Israel has to do is change its strategy over the next six months,” the Tehran-born Mofaz told Israel Radio,“to sit with the Americans in quiet diplomacy rather than rebuke them, and come to agreement with the U.S. on real red-lines.”

To contact the reporter on this story: Calev Ben-David in Jerusalem at cbendavid@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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