AM - Monday, 12 December , 2005 08:24:00 Reporter: Mark Willacy TONY EASTLEY: The Israeli Government is denying reports that it's drafted plans to attack Iran's nuclear sites, but at the same time it hasn't ruled out a strike if diplomacy fails.
Britain's Sunday Times newspaper says it's been told by Israeli military officials that both ground and air forces would be used to knock out Iran's nuclear program.
It follows weeks of tension between Tel Aviv and Tehran.
Middle East Correspondent Mark Willacy reports from Jerusalem.
MARK WILLACY: To his Cabinet, and to the Israeli public, Prime Minister Ariel Sharon has repeatedly vowed that he will not accept an Iran which has the atomic bomb, and he's warned that Israel has the ability to deal with this problem.
24 years ago Mr Sharon was the man who convinced the then Israeli leader Menachem Begin to strike Iraq's Osirak nuclear reactor.
And now many believe the former army general is once again devising plans to take out another potential nuclear threat.
Britain's Sunday Times newspaper is reporting that Prime Minister Sharon has told his military officials be ready for a possible attack on Iran's nuclear compounds by March next year.
The paper says it's received confirmation from Israeli military sources that Israel has established an intelligence base in northern Iraq and has uncovered a number of Iranian sites used to enrich uranium which are unknown to the International Atomic Energy agency.
The report states that if an attack is approved, both Israeli air and ground forces will be employed.
Publicly Israeli officials are dismissing the Sunday Times story.
Ehud Olmert is Israel's Deputy Prime Minister.
EHUD OLMERT: This is ridiculous. I don't know of any decision, I think it's entirely baseless. It is true that Israel is entirely unhappy about developments with Iran. We believe that this is the ultimate responsibility of the international community.
MARK WILLACY: But privately Israeli military officials are not ruling out strikes against Iran's nuclear sites.
And just three days ago Defence Minister Shaul Mofaz said Israel must prepare solutions other than diplomatic to the question of Iran's nuclear program.
Mohamed ElBaradei is the head of the International Atomic Energy Agency, and the man charged with finding out if Iran is trying to build the bomb.
MOHAMED ELBARADEI: My belief today that if you really want a durable solution to the Iranian issue, it might be slow, it might be frustrating, but diplomacy and verification is the way to go.
If we reach that end, if we discovered, for example, that Iran is not cooperating, that we see an imminent threat, well, we have a different ball game.
MARK WILLACY: And Mohamed ElBaradei believes Iran has three months to co-operate with his inspectors, or the UN Security Council may impose sanctions.
But for Israel, just as disturbing as Iran's nuclear ambitions, is the language being used by the country's new president.
Last month Mahmoud Ahmadinejad said Israel must be wiped off the map. And then, just a few days ago he questioned whether the Holocaust happened, going on to suggest Israel be moved to Germany and Austria.
Over the weekend, his comments were tacitly endorsed by Iran's supreme leader, Ayatollah Ali Khamenei.
Israeli Foreign Minister Silvan Shalom says an Iranian regime with a nuclear bomb would represent a doomsday scenario for the Middle East.
SILVAN SHALOM: It would be a nightmare for all of us if this type of regime will hold the nuclear bomb
TONY EASTLEY: Israel's Foreign Minister, Silvan Shalom.
''The London Times'' has reported that, according to military sources, Israeli Prime Minister Ariel Sharon has ordered Israel's armed forces to be prepared by the end of March for an attack on alleged secret uranium enrichment sites in Iran.

Israel has officially denied that it plans to attack Iran. However, Sharon warned, "Israel—and not only Israel—cannot accept a nuclear Iran. We have the ability to deal with this and we’re making all the necessary preparations to be ready for such a situation."

Israel is now at "G" readiness, which is the highest stage.

Israel's general election is on March 28, which coincides with the March deadline set by Sharon.  Former Prime Minister Benjamin Netanyahu, who is currently the frontrunner to lead the Likud party, claimed that if Sharon does not attack  "then when I form the new Israeli government, we’ll do what we did in the past against Saddam’s reactor, which gave us 20 years of tranquillity".

The uranium enrichment sites are said to be concealed in civilian locations.