Israel

June 2008 | Risk Summary

Speculation about the possibility of an Israeli attack on Iran's nuclear facilities is rising once again, and although this is not our core scenario - we think the nuclear dispute can be solved diplomatically - it does look as though the government is preparing for all eventualities. The New York Times reported in June that the Israeli military had conducted a 'rehearsal' for a strike on Iran. We think an attack could backfire, with the Iranians and their Lebanese allies Hizbullah likely to retaliate harshly to any Israeli aggression. Closer ties between Iran and Hamas of late also suggest that

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