Is there a significant chance that Israel will attack by year end Iran’s nuclear facilities? The German magazine Spiegel argues so in a two-part article “Mission Doable“ and “‘We Will See a Middle East in Flames’“ (hat tip to Fabius Maximus):

While the Europeans continue to pin their hopes on diplomacy and are convinced that a negotiated solution that would allow Tehran to save face is still possible, the Israelis already view the UN sanctions regime as a failure. Russia and China, they say, sabotaged the boycott from the very beginning, and even the Europeans have only half-heartedly supported sanctions. More rumors about a strike by Israel at Iran.

Dani Yatom, a member of the Israeli parliament, the Knesset, was invited to attend a NATO conference in Brussels last year. While reviewing the agenda, Yatom, a retired major general, was surprised to see that the meeting was titled “The Iranian Challenge” and not “The Iranian Threat.”

When a speaker with a French accent mentioned that a US military strike against Iranian nuclear facilities would be the most dangerous scenario of all, Yatom said, politely but firmly: “Sir, you are wrong. The worst scenario would be if Iran acquired an atom bomb.”

Yatom, 63, has spent most of his life in the military. He was a military adviser to former Prime Minister Yitzhak Rabin and, in the mid-1990s, was named head of Israel’s Mossad intelligence agency. Nevertheless, Yatom, a member of the Labor Party, is not some reckless hawk. Unlike most Knesset members, he flatly rejects, for example, a major Israeli offensive against the Islamist Hamas in the Gaza Strip.

But Yatom’s willingness to strike a compromise ends when he is asked what he considers to be the best response to the Iranian nuclear program. “We no longer believe in the effectiveness of sanctions,” says Yatom. “A military operation is needed if the world wants to stop Iran.”

When Israeli Transportation Minister Shaul Mofaz, a former defense minister, expressed similar sentiments 10 days ago, they were viewed, especially in Europe, as the isolated opinions of a card-carrying hardliner seeking to score points with the electorate in a bid to succeed Prime Minister Ehud Olmert. In truth, however, there is now a consensus within the Israeli government that an air strike against the Iranian nuclear facilities has become unavoidable. “Most members of the Israeli cabinet no longer believe that sanctions will convince President Mahmoud Ahmadinejad to change course,” says Minister of Immigrant Absorption Yaakov Edri.

The one question over which Israel’s various political groups disagree is the timing of an attack. The doves argue that diplomatic efforts by the United Nations should be allowed to continue until Iran is on the verge of completing the bomb. That way, Israel could at least argue convincingly that all non-military options had been exhausted.

The hawks, on the other hand, believe time is running out. They stress that there is now a “favorable window of opportunity” that will close with the US presidential election in November, and that Israel can only depend on American support for as long as current US President George W. Bush is still in charge in Washington. They are convinced that the country cannot truly depend on any of the candidates to succeed Bush in office….

Politicians in Berlin have noted with concern signs of the next war brewing in the Middle East. Former Foreign Minister Joschka Fischer, who travels regularly to Jerusalem and Washington for political talks, warns that Israel could see the Bush presidency as its last chance to gain American support for a military strike. “Politically speaking, the window for action is now, in the last months of George W. Bush’s term in office,” Fischer wrote recently. “The Middle East is headed for another major confrontation.”…

We recently reported here on the suggestions by former German Foreign Minister Joschka Fischer that such an attack is imminent.

Of course some commentators strongly disagree. For example Fabius Maximus argues:

“more rumors of an attack by Israel at Iran. Just rumors, but another in a long string of rumors. Clearly Israel sends signals of some kind to Iran. Does Iran fear an attack, or hope for one? Would a strike at Iran strength Israel’s geopolitical position, or destroy it? We can only guess at the answers. See the links at the end for my guesses about these things. (1) Israel will not attack. (2) If it did, the results would be catastrophic for Israel.”

So the issue is open of whether Israel will attack and whether this attack will be tacitly supported by the US and some other European powers. But the drumbeats of war are now sounding louder and are a factor in the recent further rise in oil prices.

As we argued here recently:

“consider the economic and financial consequences of such action.

First, even before Iran may try to retaliate to this action by trying to block the flow of oil from the Gulf, oil prices would spike above $200 dollar a barrel.

Second, Iran could react militarily to such Israeli action (that would be taken with the tacit support and the military logistic support of the US) by unleashing its supporters in Iraq against the US military forces there. That would trigger a military reaction by the US that would start a sustained air-led bombing campaign against Iran’s military capabilities (air force, anti-aircraft defenses, radar and other military installations, etc.)

Third, Iran would unleash its supporters in Lebanon and Gaza (Hezbollah and Hamas) in a military confrontation with Israel. A broader war will follow in the Middle East.

Fourth, Iran would use both the threat of blocking the flow of oil out of the Gulf and an actual sharp reduction of its exports of oil (an embargo) to spike the price of oil. Oil prices would rapidly rise above $200 per barrel and the US and global economy would spin into a severe stagflationary recession (like those triggered by the sharp spikes in the prices of oil following the staflationary shocks of the Yom Kippur war in 1973, the Iranian revolution in 1979 and the Iraqi invasion of Kuwait in 1990).

Fifth, while Sunni regimes may – in private – sigh relief following the destruction of the nuclear capabilities of the Shiite Iranian regime – the Sunni Arab street (the masses of poor Sunnis) from Algeria to Egypt and all the way to Pakistan, India and Indonesia may become even more anti-Western and anti-American leading to the risk over time of rise of anti-Western fundamentalist regimes in many Arab countries.

Sixth, the Bush administration whose hands have been tied by the new National Intelligence Estimate (that argued that Iran had suspended its program of development of nuclear weapons) would thus be able to strike Iran – via Israel - before the end of its term. Such October surprise by Israel would also certainly lead to the election of McCain and defeat of Obama as a national security crisis of such an extent would doom the chances of Democrats to win the White House. So both Israel – that prefers McCain to Obama and is hurried to act as it is wary of the constraints that an Obama presidency may put on its ability to act against Iran – and the Bush administration would guarantee the election of McCain.

Now, it is not certain – as argued by Fischer – that Israel will strike that early; this is just a guess and a prediction by one observer even if many others think likewise. But if such action were to be taken by Israel the consequences outlined above would be the clear outcome: a major global recession, wars throughout the Middle East (Iran, Iraq, Gaza, Lebanon, Israel, etc.) and a major increase in geopolitical instability.”