Israel felt that Iran was the bigger danger to both Israel and the USA, and told the US so - that it would be more important to attack Iran. I remember reading the news reports at that time. Israel gave support to the invasion of Iraq but it was its second choice. In hindsight, Israel was right.
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Hamas operative, 24, accused of attempting to attack soldiers on Gaza border (Haaretz)
from the article: MI figures out what went wrong in Lavon affair - 55 years later