U.S. Army Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, is scheduled to arrive in Israel this week for talks with his Israeli counterpart, Lt. Gen. Benny Gantz. Dempsey may also meet with Israeli Prime Minister Benjamin Netanyahu.

The drill was announced shortly after American military officials reportedly expressed concern that Israel was preparing an attack on Iran's nuclear facilities and would not warn them in advance. Although American and U.S. officials are in close contact on defense matters, especially regarding Iran's disputed nuclear program, Jerusalem and Washington are at odds over how aggressively to approach with the issue.

The drill, slated for May and named "Austere Challenge," was announced in November by Andrew Shapiro, U.S. assistant secretary of State for politics-military affairs, at the Washington Institute for Near East Policy. The exercise as originally planned would include more than 5,000 U.S. and Israeli forces and, among other things, simulate Israel's ballistic missile defense. It would be the "largest and most significant joint exercise in the allies' history," Shapiro had said.

REPORTING FROM JERUSALEM -- The United States and Israel agreed to postpone a large joint military exercise from this spring to late in the year to avoid aggravating an already tense regional situation driven by conflicts with Iran, Israeli media reported Sunday .

Talk of a military strike against Iran to stop its nuclear program continues to buzz, adding to tensions surrounding recent developments that include the assassination of an Iranian nuclear scientist last week in Tehran. Iranian officials, who maintain that their nuclear research is intended for peaceful purposes, accused Israel and the U.S. of responsibility for the attack. Both denied involvement.

Two months after an International Atomic Energy Agency report said there was credible evidence that Iran might be attempting to develop nuclear weapons, Israel says economic sanctions are beginning to impact Iran but need to be tightened considerably if diplomacy is going to stop Tehran's efforts. In an interview with an Australian newspaper, Netanyahu said international pressure, combined with the threat of a military strike, was working and the Iranian economy was "beginning to show signs of stress."

His deputy, former chief of staff Moshe Yaalon, told Israel radio Sunday that the international community must force Iran to "face the dilemma of choosing between its nuclear program or its regime as soon as possible," adding tougher sanctions were necessary to isolate the regime.

"The military option must come last," said Yaalon, who added that "Israel must be prepared to defend itself."

Yaalon expressed disappointment that sanctions have not been expanded to Iran's central bank and its oil exports, attributing Washington's stance to a reluctance "to drive up oil prices in an election year."

Israeli Foreign Minister Avigdor Lieberman and his deputy Danny Ayalon were headed to Poland and Britain, respectively, for talks on precisely this, according to Israeli radio Sunday.

"Coordinated and smart moves will make it possible to stop Iran's nuclear program by economic and diplomatic means too," Ayalon said, adding that "international sanctions have not been exhausted and this is currently at the center of discussions."

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-- Batsheva Sobelman

Photo: Israeli soldiers search the ruins of a collapsed building during an army exercise simulating an attack by a car bomb in Jerusalem in December. Credit: Abir Sultan / European Pressphoto Agency