Decision time on Iran approaching

THE world is moving towards a decision point on Iran and a key player in any decision will be the government of Israel. I have just spent 10 days in Israel and every discussion there - almost every thought - is infused with Iran.

Danny Ayalon, Israel's deputy foreign minister and former ambassador to Washington, thinks some decisions will be made in a matter of weeks. Everything is in the balance. The possible consequences are stark and enormously disquieting.

They include: a nuclear-armed Iran, an explosion of global terrorism and a new war in the Middle East. All are possible.

I met Ayalon for a long discussion in a small ante-room in Tel Aviv's Bar-Ilan University, oddly enough over haddock and mayonnaise.

The central question asks itself: will the world succeed in preventing Iran from acquiring nuclear weapons? "I would say it's touch and go," Ayalon says. "Iran is a threat not just to Israel, but to Sunni regimes such as Saudi Arabia, Egypt, the (Persian) Gulf countries, countries in North Africa.

"A nuclear Iran would have a disastrous effect on the entire world order."

Ayalon, steel-grey-haired, sober, judicious and diplomatic of demeanour, then lists some of the consequences of a nuclear-armed Iran: "Iran could control the oil supply and dictate oil prices.

"Anyone who says don't rock the boat because it will jack up oil prices should try and imagine what will happen under a nuclear Iran.

The Iranians "will also have complete protection in their aggressive actions in terrorism around the world".

"They are increasingly penetrating into Latin America through Venezuela. They are influential in Lebanon through Hezbollah, in Syria, among the Palestinians through Hamas, in Africa, where they are looking for uranium."

It is impossible to get Israeli government figures to say what the red line is for Israel with Iran, whether Jerusalem would take pre-emptive military action to destroy or at least retard Iran's nuclear program.

Both Jerusalem and Washington have studied intensely both the risks and the opportunities of striking Iran's nuclear program.

And there are endless reports, which Israelis will never comment on, of Israeli and US efforts to sabotage and disrupt Iran's nuclear program by non-military means.

In Israel these are life and death matters. Iran's President, Mahmoud Ahmadinejad, has famously called for Israel to be wiped off the map. Ayalon offers a measured and mixed assessment of the effectiveness of efforts, especially sanctions, to constrain Iran.

"Probably in a matter of weeks we will have to sit down and reflect on how effective the sanctions have been," he says. "Notwithstanding the technical problems Iran has, it's touch and go. The sanctions were effective on the Iranian economy, and in undermining the self-confidence of the Iranian leadership. But these efforts have not yet changed the Iranians' behaviour. The Iranians were surprised by the UN resolution (on sanctions) and by the extra measures a number of nations, such as Australia, took. This is the first time the Iranians are paying a price for their international defiance.

"Iran is not without its vulnerabilities. Certainly, we have not exploited all of them. Realistically, there will have to be radical change in Iran's behaviour. They continue to enrich uranium, to develop new generations of centrifuges, and new missiles. Those who say 2011 is going to be an important year may be right."

So, how close is Iran, really, to nuclear weapons? "They have not yet reached the technical capability for a nuclear weapon, but if left to their own devices they will within one to three years."

There is no doubt Iran is overwhelmingly the most important issue today for Israel (as it is for Washington, North Korea notwithstanding). But it is not the strategic issue the world most often says it wants Israel to solve. That is the future of Palestinians in the West Bank, East Jerusalem and the Gaza Strip, and the establishment of a Palestinian state.

The Israeli-Palestinian dispute seems as ever far away from peaceful solution. The Palestinians are refusing to engage in face-to-face negotiations with the Israelis. The Israelis rebuffed a US request for a further freeze on construction of Jewish settlements in the West Bank and Jewish neighbourhoods in East Jerusalem.

Yet Australia's Foreign Minister, Kevin Rudd, on a recent visit to Israel, spoke of an "historic opportunity" to get a full peace deal.

"There is a window of opportunity," Ayalon concedes politely in response to Rudd's statement, but Ayalon's subsequent words seem to offer very little encouragement for this view.

"But right now we are sitting at the table all alone. The centre-right government of Prime Minister Benjamin Netanyahu had a big change of heart. Two years ago, at this university, Netanyahu accepted a Palestinian state."

Previously this was a position of the centre-left in Israel. Now there is a consensus among Israelis for a Palestinian state.

"The Palestinians don't want to come to the table right now mainly because of their internal disputes. We should not make the perfect the enemy of the good, however. Even if we cannot reach an end-of-claims and end-of-conflict agreement, at least we should get a series of interim agreements.

"We need security and they need independence."

Ayalon argues that Jewish settlements on the West Bank are not an obstacle to peace. He says Jewish settlements outside East Jerusalem take up about 3 per cent of the the West Bank, a figure also used by Rudd during his visit.

"We are not building new settlements. We are not extending the boundaries of existing settlements. And there are no government incentives for people to live on the West Bank.

"We made a down-payment on the settlements issue in 2005. Under Ariel Sharon we evacuated 21 settlements in Gaza and four more in the West Bank. Settlements should not be used as an excuse. But just as we do not want the Palestinians to pre-judge an agreement, so we say also for ourselves that settlements won't pre-determine the outcome."

Ayalon says the Israeli view of the Palestinians' future has been transformed over the past two decades. Twenty years ago, he says, there was an Israeli consensus against a Palestinian state.

Then came the Oslo Accords, the return of Yasser Arafat to the West Bank, and prime minister Ehud Barak's 2000 offer of all of Gaza, almost all the West Bank, and other land from Israel in compensation and a Palestinian capital in East Jerusalem. This offer was rejected and followed by the violence of the second intifada, yet the Israelis came up with an even more extensive offer under Ehud Olmert.

In contrast, Ayalon argues, "the Palestinian position has not budged one iota in 17 years".

"Their maximalist position has continued. And they also continue to look for solutions far away."

By maximalist positions Ayalon means the insistence, for example, that the several million descendants of anyone who ever lived in any part of Palestine be allowed to live in Israel proper - the so-called right of return - and the refusal to recognise Israel as a Jewish state.

By seeking solutions far away, Ayalon means the apparent belief of Palestinian leaders that they can get more concessions from Israel by international pressure than through direct negotiation.

That was evident in recent decisions of Argentina, Brazil and a number of other Latin American nations to recognise a Palestinian state. Such international moves also play into what Israelis see as a concerted international campaign to delegitimise the state of Israel.

"This is a serious concern," Ayalon tells me.

"There are real networks, some in Ramallah, also Islamist forces based in Tehran and elsewhere, and also a network of non-government organisations in the West which are being manipulated and fooled by the Islamists.

"The best way for us to answer that campaign is to be more pro-active and more fully engaged in the international community."

Israel's diplomatic establishment believes it needs to refocus on traditional diplomacy. It has joined the OECD and other international organisations. Jerusalem has a portfolio of booming relationships across Asia.

Israel, with its buoyant economy and prodigious human talent, is much more than just the sum of its military and strategic challenges. "We have a lot to offer in know-how and technology," Ayalon says.

He also expresses heartfelt appreciation for Australia's strong stand against the delegitimisation of Israel. Rudd recently told me the international campaign to boycott trade and investment with Israel was wrong in principle and it also hurt the Palestinians.

Ayalon says Australia's support has been "very important" to Israel. "Australia and Israel are like-minded countries sharing values and interests and facing common threats."

So it would make sense that there would be no better partner than Australia for Israel's renewed interest in traditional diplomacy, always assuming, of course, that the situation with Iran allows anything approaching traditional diplomacy to continue.