SYDNEY (Reuters) - Australia is at odds with its major security ally the United States over Iran, saying it is not a “rogue state” and its nuclear weapons program is for deterrence, not attack, according to U.S. cables released by WikiLeaks.

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The documents, published in the Sydney Morning Herald on Monday, also reveal that Australia’s top security organization believes Tehran sees a “grand bargain” with the United States as its best way to ensure national security.

But the Office of National Assessments (ONA) shared Washington’s fears that Iran’s pursuit of nuclear weapons could lead to conventional or nuclear war, noting a conflict between Israel and Iran was the greatest challenge to Middle East stability.

The ONA was also concerned that nuclear proliferation in the Middle East may drive Southeast Asian nations to pursue their own nuclear capabilities.

“It’s a mistake to think of Iran as a ‘rogue state’,” then ONA chief Peter Varghese told the United States in a briefing, according to the 2008 U.S. diplomatic cables from Canberra.

The cables said the ONA sought a balanced view of Tehran as a sophisticated diplomatic player rather than one liable to behave impulsively or irrationally.

WikiLeaks has provoked fury in Washington with its publications of secret U.S. cables and has vowed to make public details of the 250,000 secret U.S. documents it had obtained.

WikiLeaks founder Julian Assange is under arrest in Britain over sexual assault charges in Sweden.

TEHRAN SEEKS DETERRENCE

A U.S. diplomatic cable from Canberra in 2008 said the ONA believed Tehran’s desire to develop nuclear weapons was probably driven by a desire to deter Israel and the United States from attack rather than to launch a Middle East strike.

“ONA viewed Tehran’s nuclear program within the paradigm of ‘the laws of deterrence’, noting that Iran’s ability to produce a weapon may be ‘enough’ to meet its security objectives,’’ the U.S. embassy reported to Washington.

“Nevertheless, Australian intelligence viewed Tehran’s pursuit of full self-sufficiency in the nuclear fuel cycle, long-standing covert weapons program, and continued work on delivery systems as strong indicators that Tehran’s preferred end state included a nuclear arsenal.”

The ONA believed “Iran’s acquisition of nuclear weapons as inevitable” and the Australian government was concerned that such a move could see nuclear proliferation in Southeast Asia.

A U.S. embassy report in March 2009 told Washington that Australia was “concerned about the potential for renewed nuclear proliferation in the Middle East driving Southeast Asian states to abandon the (nuclear non-proliferation treaty) and pursue their own nuclear capabilities, which could introduce a direct threat to the Australian homeland.”

But Australian intelligence analysts believe “that 20 years of hostility (toward Washington) and associated rhetoric aside, (Tehran) regime attitudes “have fairly shallow roots.”

“The most effective means by which Tehran could ensure its national security would be a strategic relationship with the U.S. via some ‘grand bargain’,” said Australia’s security agency.