Prime Minister Ehud Olmert held a special cabinet session on Sunday on Israel's response to Iran's nuclear threat.

The senior ministers heard surveys on the development of special means and budgets for strengthening the response in the next few years.

Last week Olmert met the Knesset's Foreign Affairs and Defense Committee's strategic subcommittee and gave it an updated survey of Israel's capabilities.

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Olmert briefed the subcommittee (MKs Benjamin Netanyahu, Silvan Shalom, Tzachi Hanegbi, Ami Ayalon and Effie Eitam) on the latest strategic-security developments.

Foreign Minister Tzipi Livni, who met a number of her European Union counterparts Monday in Brussels, emphasized the importance of forming an international front to isolate Iran and pressure it to halt its nuclear project.

Livni asked the European foreign ministers to ignore economic considerations when imposing sanctions on Iran, as the nuclear threat was far greater than economic loss.

Livni met, among others, the foreign ministers of Italy and Germany, Iran's main trade partners. In her conversation with Italian Foreign Minister Massimo D'Alema, Livni referred to his recent statement that Hezbollah was only arming itself in north Lebanon.

She told him that the organization's arming itself is a threat "everywhere," which should worry not only Israel, but also the Europeans, whose soldiers serve in the UNIFIL force in south Lebanon.

Stuart Levey, U.S. undersecretary of the treasury for terrorism and financial intelligence, who is coordinating the drive for an economic boycott on Iran, visited Jerusalem on Sunday. Levey spoke to Olmert and Livni on the difficulties his initiative is encountering in European states that trade with Iran.

One of the problems hindering a boycott is the lack of a uniform European policy and the need to persuade each state separately. In addition, the Europeans argue that if they reduce their economic ties with Iran, China would simply step in and replace them.