WASHINGTON (Reuters) - U.S., Iranian and Western diplomats played down worries about a looming Israeli military attack on Iran’s nuclear facilities on Tuesday after reports of heightened tensions rattled nerves and helped drive oil prices near record highs.

An Israeli Air Force F-16 fighter plane flying above a traffic sign after taking off from an Israeli Air Force Base in in this July 20, 2006 file photo. REUTERS/Ammar Awad/Files

“The military option is the last thing that we need to do and it will not be used easily,” said a Western diplomat in Tel Aviv. “I don’t think there will be an attack in the next six months.”

Efforts to ease public fears of a possible confrontation between Israel and Iran followed more than a week of speculation touched off by a New York Times report that U.S. officials believed Israel had practiced for a possible military strike against the Islamic Republic.

Concern about a confrontation flared again on Tuesday when ABC News reported that an unnamed senior U.S. defense official said there was an increasing likelihood that Israel would attack Iran over its nuclear program, which could prompt Tehran to retaliate against both Israel and the United States.

The news jangled nerves and helped push oil prices up $2 a barrel, near the record $143.67 hit on Monday, on worries Tehran could move to halt shipments through the Strait of Hormuz. About 40 percent of all seaborne oil trade passes through that Gulf choke point. Iran is the world’s fourth-biggest oil producer.

U.S. officials sharply dismissed the ABC News report.

“I have no information that would substantiate that,” State Department spokesman Tom Casey said.

“The official State Department reaction to that is one, laughter, and saying ‘Coward, get out there and talk about in on the record if you’ve actually got something to say,’” he said, referring to the unnamed official cited in the report.

IRANIAN DOUBTS

Iranian Foreign Affairs Minister Manouchehr Mottaki told NBC News he did not believe Israel would attack Iran.

“Where Israel is today ... will not allow it to engage in regional adventurism,” Mottaki said. “Israel is still facing the post trauma of the attack against Lebanon in 2006. So we don’t believe that Israel ... is in a position to be able to engage in another attack in the region.”

But Mottaki said Iran would make no distinction between an attack by Israel or an attack by the United States and would deliver a widespread response, NBC reported.

“It should be understood that all efforts should be made towards Israel avoiding a militaristic action in the region,” he said.

The Western diplomat in Israel said there was no consensus in Israel in favor of an attack and the United States was unlikely to act because it estimated Iran’s nuclear program would not reach a point of no return for about two years.

The United States and other Western powers charge Tehran with seeking to develop nuclear weapons, but Iran says its nuclear program is for peaceful energy production.

Israel is widely assumed to be the only country in the Middle East with nuclear weapons, although it has never said it has an atomic arsenal.

Despite efforts to allay public fears of a looming clash, the United States kept up its pressure on Iran to suspend its uranium enrichment program.

U.S. envoy Garold Larson, marking the 40th anniversary of the nuclear non-proliferation treaty in Geneva, said the United States “remained very concerned that parties like Iran have violated their commitments and thereby undermined the treaty.”

U.S. Treasury Secretary Henry Paulson, in Germany on a European trip, said he was talking to European leaders about coordinating efforts “to make sure the financial system isn’t perverted or abused by those who would attempt to use it to acquire weapons, to further their nuclear objectives or to finance terrorists.”