Military Intelligence, which until recently believed that Western action could halt Iran's nuclear program, now believes this will not be the case, according to a new intelligence assessment given last month to Prime Minister Ehud Olmert.

The assessment states bluntly that "Western states will not succeed in halting the Iranian nuclear program," a senior government official told Haaretz.

MI's about-face is due partly to new intelligence regarding the pace of Iran's nuclear progress, and partly to a revised assessment of the effectiveness of the international front against Iran. Previously, the official explained, MI believed the West might either take military action against Iran or impose substantially tougher sanctions. Now, it believes that both options are highly unlikely, especially given the probability that Washington will open a dialogue with Tehran following next month's U.S. presidential election.

At best, the new assessment says, Western sanctions will "slightly delay" Iran's achievement of sufficient uranium enrichment capacity to produce nuclear weapons. Currently, Israel believes this point will be reached in middle or late 2009.

On another issue, MI chief Amos Yadlin told the cabinet yesterday that Syria was continuing to arm Hezbollah, and had in fact become the Lebanese militia's arsenal.

"Assad is continuing to throw open the doors of Syria's warehouses for Hezbollah, and has become 'Hezbollah's arsenal.' Assad trusts Hezbollah more than his own army, and Hezbollah operatives behave in Syria as if it were their own [country]," said Yadlin.

Israeli demand

A key Israeli demand in indirect peace negotiations with Syria is that it cut its ties with Hezbollah, and in particular, cease supplying the group with weapons.

Yadlin did actually say he believed Assad was interested in a peace deal with Israel "on his terms," but was waiting for a new U.S. administration.

Yadlin added, "The Syrians have removed almost every restraint; they are irresponsibly giving Hezbollah almost every strategic capability they own."

When asked about a September car bombing in Syria that left 17 dead, Yadlin said, "Those who sleep with dogs shouldn't be surprised when they wake up with fleas.

"This was an attack carried out by global Jihad ... which is aided by the Syrian regime, which gives [terrorists] immunity and free passage to Iraq and Lebanon."