Economic sanctions by the European Union and the United States can only be allowed a limited time period to prevent Iran from attempting to acquire a nuclear arsenal before a military strike must be contemplated, Israeli leaders have declared.

The tough public stance from Tel Aviv comes amid conflicting reports on the readiness of the Israeli military establishment to carry out an attack on Iran.

One account claims that Israel's security agencies have concluded that the turmoil predicted from a strike, and the likely response from Tehran, has been widely exaggerated. However, a senior British official told The Independent that the hierarchy of the intelligence service, Mossad, and the armed forces continued to have deep trepidation about conflict in the region.

Speaking at the Davos economic summit yesterday, the Israeli Defence Minister, Ehud Barak, yesterday warned that a situation could be rapidly reached when even "surgical" military action could not block the Tehran regime from getting the bomb. "We will know early enough whether the Iranians are ready to give up their nuclear weapons," following measures such as the recently announced EU oil embargo, he said.

Mr Barak continued, "We are determined to prevent Iran from turning nuclear. It seems to us to be urgent, because the Iranians are deliberately drifting into what we call an immunity zone where practically no surgical operation could block them".

Two months ago, Mr Barak had warned that a war with Iran "will be no picnic". But reports emanating from Israel maintained that the Defence Minister and the Prime Minister, Benjamin Netanyahu, have now accepted analysis that the scope of possible Iranian retaliation will not be as far reaching as previously thought.

A paper published by the Begin-Sadat Centre for Strategic Studies holds that the fear of Iranian missile attack against Israel has been overblown and would cause only relatively minor damage. Another paper by the Institute of National Security Studies at Tel Aviv University co-authored by Amos Yadlin, a former chief of military intelligence, argues that Tehran's could only close the Strait of Hormuz, a key oil trading route, as it has threatened to do, for a very short time. In any event, it would also mean that Iran's own oil exports would be stopped.

In 1981 Israeli warplanes destroyed the Osirak nuclear site being built by Saddam Hussein's regime in Iraq. In 2007, in another attack, a facility in Syria the UN nuclear watchdog concluded could be a secretly built nuclear reactor was similarly attacked.

Iran with nuclear weapons would become almost invulnerable, Major General Amir Eshel, the chief of the Israeli army's planning division has warned in a public meeting in Jerusalem.

He recounted that a visiting senior Indian officer was asked why Delhi did so little to retaliate against Pakistan following the Mumbai attacks, which many suspect had been organised by elements close to the Pakistani secret service.

"When the other side has a nuclear capability and is prepared to use it, you think twice" the Indian officer is said to have replied.

However, the senior British official, who is in close touch with the Israeli security establishment, stressed: "It is the politicians [in Israel] who are in more in favour of a military strike. Mossad and the IDF (Israeli Defence Forces) are concerned with the fallout of that on Israel and across the region."

The official added that all the indications were that the Iranian leadership has not yet decided whether to actually produce nuclear weapons, but would like to be in a position where they would be able to do so comparatively quickly if necessary. At present the country was between two to three years from producing a conventional nuclear weapon, he added.

The Iranian president Mahmoud Ahmadinejad offered to revive talks with the West, Russia and China and blamed "enemies" for sabotaging previous talks earlier this week.