In early June Supreme Ayatollah Ali Khamenei warned that if Israel attacked Iran's nuclear sites, it would receive "a thunderous blow". Yet the means for any retaliation are disappearing. The position of Iran's Syrian client has sharply deteriorated, despite covert Revolutionary Guard support for President Bashar al-Assad. Syria is the lynchpin for Tehran's ability to unleash Hizbollah, for Iran is the world's leading state sponsor of terrorism.
Israel's new Iron Dome defence shield has minimised the impact of Hizbollah's artillery shells or short-range rockets, while the Arrow interceptor bodes ill for any ballistic missiles Iran may launch. Computer malware seems to be hitting Iranian systems with increasing frequency, evidence of prime minister Bibi Netanyahu's desire to make Israel the world's fifth cyberpower.
How to read Israeli policy is difficult, as I learned as a guest at the recent National Security Strategy conference in Tel Aviv. The outgoing Mossad chief, Meir Dagan, has called an attack on Iran "the stupidest thing I have heard". His Shin Bet colleague, Yuval Diskin, says he has no faith in a "messianic" and "hysterical" Netanyahu or his hawkish defence minister Ehud Barak. The chief of staff, Benny Gantz, argues that the Iranian leadership consists of "very rational people" who will not attempt nuclear "breakout", an implicit rejection of the dominant idea that the ayatollahs are messianic lunatics. Only a fool would discount such opinions, or seek to discredit these men by character assassination based on unspecified grudges. Of course, the spies could be protesting too much.
While the "revolting spies" argue that a precipitate attack on Iran would accelerate Iran's efforts to acquire a nuclear bomb and alienate Israel's allies, Netanyahu and Barak see this in terms of Israel's survival as a Jewish state. At the conference Netanyahu recommended The Lessons of History by Will and Ariel Durant, which states: "A world order will not come by a gentlemen's agreement, but through so decisive a victory by one of the great powers that it will be able to dictate and enforce international law." Netanyahu spun this as meaning Israel would do whatever it needed to guarantee its survival.
Since the US has ruled out containment or deterrence of a future nuclear-armed Iran, that leaves diplomacy and sanctions, for the moment. Sanctions have had a major impact on Iran, with oil exports down by a quarter this year. They are due to be tightened further by a European oil embargo and measures against the Iranian Central Bank. The general global downturn has not helped Iran. According to the IMF, Iran needs oil at $117 a barrel to balance its bloated annual budget of $462 billion, much of it expended on subsidies; the current price hovers below $100.