Even as Prime Minister Benjamin Netanyahu continues his diplomatic offensive against what he calls a "dangerous" compromise on Iran’s nuclear program, Israel’s military intelligence seems open to a deal, even one that relaxes the Western sanctions on Iran that Mr. Netanyahu has vocally supported.

According to an unclassified assessment shared by a senior Israeli officer, military intelligence is focused on the implications of a potential compromise between Iran and the P5+1 (the US, Britain, France, Russia, China, and Germany).

A deal would boost President Hassan Rouhani, whose surprise victory in June appeared to herald a political shift in Iran – although he is up against hardliners who oppose a deal.

In the background briefing with foreign journalists, which covered a wide range of Middle East hotspots, the intelligence officer said Iran was one of several countries that could buck the general turmoil across the region.

"We see a bit of a possibility, although it’s quite problematic, of more … stability," said the officer, who spoke on the basis of anonymity. But that is dependent on the success of negotiations "over the nuclear project, but more than that, over the relief of the sanctions on the Iranian economy," he said.

Though it’s not the first time that parts of Israel’s security establishment have broken with Mr. Netanyahu’s approach on Iran, the intelligence report offers fresh evidence of stark differences within Israel's power structure.

Another parting of ways: While Netanyahu has demanded that negotiators seek the full dismantling of Iran’s nuclear capability, the military official said the intelligence branch does not think this demand is realistic. The international community isn't talking about "deleting" Iran's nuclear program, he said.

Tehran has already become a "nuclear threshold" country, building the infrastructure, fissile material and know-how necessary to build a nuclear weapon within a relatively short time if it decided to do so, the intelligence officer said.

Iran has not made that decision yet, according to the assessment – likely because US threats of attack deterred Iranian officials, he said.

Mr. Netanyahu has called for a ratcheting up sanctions on Mr. Rouhani, whom he calls "a wolf in sheep’s clothing," and has lobbied US congressmen for support. The Israeli leader has argued that any relaxation of US sanctions would undermine the entire system of sanctions. President Barack Obama, however, argued on Tuesday that world powers could tolerate a modest relaxation while a final deal is being hammered out because they could be easily reimposed.

Iranians are frustrated with the country’s economic woes brought on by sanctions, so an easing would likely give Mr. Rouhani a boost in domestic support. If talks collapsed, cutting short efforts to lift some of the sanctions, Mr. Rouhani would likely see a major dip in support and possible unrest, according to the military's calculations.

While Mr. Netanyahu would welcome such turmoil, the Israeli intelligence officer said the military views the election of Mr. Rouhani in June as a genuine protest vote of the masses that surprised the Iranian regime, rather than a deliberate ploy to curry favor in the West.

"I’m not here as a representative of the prime minister. Regarding Israeli policy, you’ll have to ask him. The intelligence assessment is that we think Iranian regime has legitimacy problems," explained the officer. The officer pointed to the electoral surprise of Mr. Rouhani as evidence.

"The fact that economic numbers are not good and that there is some kind of noise among the public – at least about the economic situation – makes challenges for the regime. That’s probably why Rouhani was elected in such large numbers more than anything else."

When asked if the officer sees signs of real change in Iran, he said that such a shift depends on the outcome of negotiations.

"If the deal [isn't] signed, nothing would happen. [Talks] would collapse, nothing would happen, sanctions would continue, the economic situation … would worsen probably."

The assessment seems to jibe with a report in the Israeli newspaper Haaretz two months ago which quoted from a military intelligence document that described Rouhani's election as a shift with potential for a significant change in Iran’s political system.

"They think there is an opportunity in the diplomatic track. Military intelligence thinks that the elections in Iran were a sign of strategic shift in the Iranian system," says Haretz diplomatic reporter Barak Ravid, who saw the intelligence document. "The Israeli intelligence community doesn’t see Iran as Bibi (Netanyahu) sees it…. They are taking a wait and see approach."

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But the Israeli military is far from becoming a fan of the Iranian president – he is still considered part of the Iranian establishment, says Meir Javedanfar, an Iran expert based in Tel Aviv.

"I don’t think this means we support Rouhani. The election of Rouhani shows that people of Iran want to change the nuclear strategy of Iran, to have more confidence building, and Khamenei’s efforts to create consensus behind his nuclear strategy failed."