State sources say Olmert orders top cabinet officials to draft proposals for dealing with potential nuclear Iran. Minister Ayalon: 'We must prepare for scenario where all alternatives fail'
Israel is quietly preparing for the possibility of a nuclear-armed Iran despite public pledges to deny its arch-foe the means to pose an "existential threat", political and defense sources said on Thursday.
Diplomatic Efforts 
They said Prime Minister Ehud Olmert has instructed cabinet officials to draft proposals on how Israel, which according to foreign media reports retains the only atomic arsenal in the Middle East, might deal with losing that monopoly.  
Israel predicts that Iran's nuclear program could produce warheads by 2009. Western intelligence services say it may take several more years.  
Olmert has endorsed US-led efforts to curb Iran's atomic ambitions through sanctions. He has also hinted that Israel, which bombed Iraq's nuclear reactor in 1981 and is believed to have carried out a similar raid against Syria in September, could hit Iran too if it deems diplomatic pressure a dead end.
But two senior Israeli sources with knowledge of the Olmert government's defense planning said a memorandum was being prepared for "the day after", in case Iran attains nuclear weapons.  
"There are long-term ramifications to be addressed, like how to maintain our deterrent and military response capabilities, or how to off-set the attrition on Israeli society that would be generated by fear of Iranian nukes," one source said.  
An Israeli government spokesman declined comment.    
Cabinet Minister Ami Ayalon refused to discuss classified policy-making but said Israel should pursue a three-pronged strategy on Iran: "First, we must make clear that this is a threat not just to Israel , but to the wider world. Second, we must exhaustively consider all preventive options. And third, we must anticipate the possibility of those options not working."
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