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Last update - 10:48 23/06/2008
Iran threatens 'devastating' response if attacked by Israel
By The Associated Press, Reuters and Haaretz Service
Tags: oil prices, israel, iran

Iran's defense minister on Sunday warned of a "devastating" response to any Israeli attack on the country.

Mostafa Mohammad Najjar told Iranian state television Sunday that Tehran would strongly counter any hostile action with a destructive response, considering all options regardless of time and place.

The New York Times quoted U.S. military officials on Friday as saying that Israel had recently carried out large-scale military exercises over the Mediterranean, apparently aimed at warning Iran of its capabilities to attack Tehran's nuclear sites.
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The New York Times on Friday cited unidentified American officials as saying that more than 100 Israeli F-16 and F-15 fighter jets took part in the maneuvers over the eastern Mediterranean and Greece during the first week of June.

Najjar called the exercise an operation of "psychological warfare", and said Iran would not initiate any tension or conflict.

Iran would resort to "all means available" if it was attacked, Najjar said. adding that "Iran will come up with a devastating ... response without any time limit to any hostile measure against our country."

The Iranian government on Saturday criticized the Israeli military exercises, saying it demonstrated how Israel poses a threat to global peace and security, the official Iranian news agency IRNA reported.

Also Saturday, an Israeli political official told the London-based Times that the Iranians should view the exercise as a warning.

"Read the writing on the wall" the official urged Iran. "This was a dress rehearsal, and the Iranians should read the script before they continue with their program for nuclear weapons. If diplomacy does not yield results, Israel will take military steps to halt Tehran's production of bomb-grade uranium."

Prime Minister Ehud Olmert's office declined to comment on the reported exercise, but a senior lawmaker in Olmert's Kadima Party said Saturday that diplomatic efforts to curb Iran's nuclear program have failed and that the next 1-2 years would be critical.

Tzachi Hanegbi, who heads the Knesset Foreign Affairs and Defense Committee, told Israel Radio that the world had to decide how to proceed.

An Israeli military spokesman said of the report: "The Israeli Air Force regularly trains for various missions in order to confront and meet the challenges posed by the threats facing Israel."

Meanwhile, in remarks aired Friday, the head of the United Nations nuclear watchdog said that he would resign if a military attack was launched against Iran, warning that any such attack would turn the region into a "fireball."

International Atomic Energy Agency Director General Mohammed ElBaradei told Al Arabiya television that "I don't believe that what I see in Iran today is a current, grave and urgent danger. If a military strike is carried out against Iran at this time ... it would make me unable to continue my work."

"A military strike, in my opinion, would be worse than anything possible. It would turn the region into a fireball," he said, emphasizing that any attack would only make the Islamic Republic more determined to obtain nuclear power.

"If you do a military strike, it will mean that Iran, if it is not already making nuclear weapons, will launch a crash course to build nuclear weapons with the blessing of all Iranians, even those in the West."

Earlier Friday, Oil prices jumped more than $3 on Friday on reports of rising tensions between Israel and Iran.

A hardline Iranian cleric said Friday that Israel and its U.S. ally would receive a "slap in the face" if they speak of using force against the Islamic Republic, a member of the Organization of Petroleum Exporting Countries (OPEC).

Energy experts are concerned any conflict in Iran could lead to a shutdown of the Strait of Hormuz, a waterway separating Iran from the Arabian Peninsula, through which roughly 40 percent of the world's traded oil is shipped.

Friday's spike was not the first caused by tensions between Israel and Iran. Oil prices soared $11 on June 6, after former Israel Defense Forces Chief of Staff and Transportation Minister Shaul Mofaz said in a newspaper interview that "if Iran continues with its program for developing nuclear weapons, we will attack it. The sanctions are ineffective. Attacking Iran, in order to stop its nuclear plans, will be unavoidable."

Adding to oil's gains Friday, Royal Dutch Shell shut 220,000 barrels of daily production in Nigeria after militants in speedboats attacked the Bonga offshore oil facility.

Shell said it was too soon to say how long output at the deepwater installation would be shut. Nigeria, another OPEC member, is already producing about 20 percent below potential due to sabotage by militants in the Niger Delta oil hub.

The gains marked a reversal from heavy losses Thursday that had been triggered by news China was raising domestic fuel prices -- a move that could slow demand growth in the world's second largest energy consumer -- and expectations Saudi Arabia was planning a 6 percent output hike.

"The petroleum markets rebounded ... on worries that Israeli military exercises held in the first week of June might have been preparation for a strike against Iranian nuclear facilities," said Tim Evans, energy analyst for Citi Futures Perspective in New York.

U.S. July crude, which was expiring on Friday, rose $3.12 to $135.05 a barrel by the evening, off highs of $136.80. London Brent was up $3.06 at $135.06.

China move to backfire

Oil prices had plunged nearly $5 in the previous session after China raised fuel prices by up to 18 percent, its first hike in eight months, as the government bowed to a nearly $40 increase in crude prices since the last hike in November.

Initial forecasts suggested the move by China would hurt demand, but some analysts now say consumption could rise as the price increase will encourage healthier supply at the pumps.

Chinese fuel retailers have had to deal with long queues of customers and rationing as refiners cut back on production to limit hefty losses made by selling discounted fuel.

"We do not think that a country where consumers are used to waiting 3 hours for automotive fuel in many cases will see significant negative demand elasticity from a simple 20 percent price increase," said Citi analyst James Neale.

Demand for oil by China, India and the Middle East has been cited as a factor behind crude's almost sevenfold surge from $20 six years ago to a record high of nearly $140 a barrel.

Oil's rally on Friday also came despite assurances from Saudi Arabia that it was raising its production after months of pressure from consumer nations calling for more supply.

Saudi Oil Minister Ali al-Naimi confirmed on Friday the kingdom will be pumping 9.7 million barrels per day of crude in July, an increase of 550,000 barrels per day since May.

Oil traders said Friday's strength was also supported by a weaker dollar, which improves the purchasing power of buyers using other currencies and encourages investors to ply money into commodities as a hedge against inflation.

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  • Obama, McCain aides agree: Israel, U.S. must discuss strike on Iran
  • Report: Israel held military drill as prep for attack on Iran
  • Iran says ready to negotiate on incentives to halt nuclear program
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      1.   easy solution: confiscate iranian petrol - reparations 23:48  |  frenz 20/06/08
      2.   prey tell ElBaradei what good have you done to date? you failed 00:27  |  ralph 21/06/08
      3.   El Baradei should resign now 00:28  |  Brod 21/06/08
      4.   The Iran War Tax 00:34  |  Mark Lincoln 21/06/08
      5.   AT LEAST ONE GOOD REASON 00:35  |  Brant 21/06/08
      6.   Oil price up bcos lotsa planes need lotsa fuel to get to Natanz 00:44  |  Alan SA 21/06/08
      7.   What if ... 01:00  |  MR 21/06/08
      8.   el baradei threatening again 01:04  |  Arie 21/06/08
      9.   iran, the un and el baradei 01:06  |  Arie 21/06/08
      10.   This Al Baradei guy ... 01:07  |  Marcella 21/06/08
      11.   Resignations & What "Never Again" Means 01:10  |  Brad 21/06/08
      12.   Iran - a Carter legacy that Obama will `engage` 01:10  |  Christopher 21/06/08
      13.   EL BARDEI SHOULD RESIGN ANYWAY, HE`S AN IRANIAN AGENT TOO 01:22  |  David P 21/06/08
      14.   Iran loves Israel, and money 01:29  |  Wendy 21/06/08
      15.   If the intention was to make the World take notice 01:33  |  Chris Linthwaite 21/06/08
      16.   Why wait? 02:08  |  Morris Valentine 21/06/08
      17.   OIL BELONGS TO THE FEW...THE SUN BELONGS TO ALL... 02:10  |  Daniel Garcia 21/06/08
      18.   All BS, I travel almost daily into China, there is no shortage of 02:11  |  Old China hand 21/06/08
      19.   MORE MONEY FOR IRAN! KEEP TALKING! 02:48  |  American 21/06/08
      20.   attack 02:57  |  Shmuelshachor 21/06/08
      21.   up a creek without a paddle 03:00  |  Neil Golan 21/06/08
      22.   OIL =TERRORISTS MONEY 03:04  |  Neil Golan 21/06/08
      23.   TELL ME IT`S NOT ISRAELS FAULT NOW 03:13  |  VIPER 21/06/08
      24.   IRAN IS AL QUIDA!!! 03:15  |  NAJI BENNAJI 21/06/08
      25.   #1 Morris Valentine goes all hairy-chested 03:16  |  Johnboy 21/06/08
      26.   Strap Mofaz to the bomb rack and drop him in Iran! 03:25  |  Johnboy 21/06/08
      27.   #4 American 03:36  |  schafe82 21/06/08
      28.   Mohamad ElBaradei Stop The Drama What A Joke 03:46  |  Kipperraes 21/06/08
      29.   Did you notice the tide in favor of action, now up only $3? 03:46  |  Pervert 21/06/08
      30.   2 for the price of 1! Iran AND El-Baradei, yeeeey 03:46  |  Pervert 21/06/08
      31.   How you like that power Islamic Iranians??? 04:01  |  D 21/06/08
      32.   just talk! 04:11  |  sal 21/06/08
      33.   Baradei 04:12  |  Brod 21/06/08
      34.   works on many levels 04:17  |  Sabra 21/06/08
      35.   People starving and poverty stricken thanks to Israel 04:17  |  Stupidity 21/06/08
      36.   one less mohammed 04:30  |  sam 21/06/08
      37.   eef off Israel, you warmongering bastards 04:35  |  POP 21/06/08
      38.   #4 American 04:40  |  Francois 21/06/08
      39.   DOES EL BARADEI SERIOUSLY THINK ANYBODY WILL MISS HIM? 04:51  |  Arik Silverman 21/06/08
      40.   Bye Bye Israel! 04:56  |  Ali 21/06/08
      41.   #22 IRAN IS CONDEMNED 04:59  |  Commonsense 21/06/08
      42.   History 05:04  |  Isa 21/06/08
      43.   FOR POP 05:08  |  Brant 21/06/08
      44.   The fireball is going to happen one way or.. 05:19  |  royzer 21/06/08
      45.   They wont respond 05:19  |  Parviz 21/06/08
      46.   # 11 Johnboy: strap Mofaz to a bomb rack & drop him in Australia 05:38  |  Darth Zaider (Ed) 21/06/08
      47.   The Wrong Target 06:50  |  Jeff Northridge 21/06/08
      48.   If the region blows up, you can blame it on..... 06:52  |  R 21/06/08
      49.   #15, Lithwaite 07:16  |  Cipora Julianna Kohn 21/06/08
      50.   If not Now, When! 07:22  |  panamboy 21/06/08
      51.   #16, Morris Valentine 07:23  |  Cipora Julianna Kohn 21/06/08
      52.   It is Israel at fault you morons 07:53  |  Marilyn 21/06/08
      53.   #25 johnboy has NO chest hair and so CANNOT join the dots 07:57  |  CK Tan 21/06/08
      54.   Oil prices jump 07:58  |  Akiva P 21/06/08
      55.   Mohammed ElBaradei = IRANIAN AGENT 08:02  |  SAVE THE WEST 21/06/08
      56.   IRAN AND BIN LADEN PLANNED 9/11 TOGETHER................. 08:04  |  PROPHET 21/06/08
      57.   Does anyone remember Lebanon II 08:10  |  Guy From NYC 21/06/08
      58.   #41 Re: Commonsense (or thinks so) 08:13  |  Guy From NYC 21/06/08
      59.   If you oppose attack on Iran, support REAL & EFFECTIVE sanctions 08:14  |  Dan 21/06/08
      60.   #46 Darth Zader is quite in error 08:20  |  Johnboy 21/06/08
      61.   There is a greater imperative than self defence 08:28  |  Brad 21/06/08
      62.   Iran wins war of words, Marilyn 08:34  |  Jeff 21/06/08
      63.   Oil prices jump after report of Israeli drillfor Iran attack 08:34  |  martin list, m.d. 21/06/08
      64.   Ali: Here is the Rub 08:38  |  Brad 21/06/08
      65.   Morris Valentine #16 NO, NO, NO! 08:53  |  S 21/06/08
      66.   What Mohamad Elbaradei Knows Iran Bombed No Need For His Position 09:10  |  Dish It Out 21/06/08
      67.   Jeff in Tacoma: Wake up Dhimmiboy 09:23  |  Guy From NYC