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Deputy Defense Minister Ephraim Sneh denied Saturday a British newspaper report that Israel is negotiating with the United States over a potential attack on Iran's nuclear facilities.

The Daily Telegraph reported Saturday that Israel is negotiating with the U.S. over permission for an "air corridor" over Iraq, should an attack on Iran's nuclear facilities become necessary.

Military authorities would need permission from the U.S. Department of Defense for any such operation, the report said.

"International authorities, particularly in the West, who want to avoid direct involvement with Iran, are anxious to spread the story that we will strike Iran," Sneh told Israel Radio.

"Those who do not want to work politically, diplomatically and economically are diverting attention to the operation that we are said to be conducting," he said.

"The international community's focus should be on imposing economic sanctions on Iran for defying UN Security Council resolutions," he said.

The report cited a senior Israeli defense official who said talks are currently underway between the two countries over the possibility that Jerusalem decides to take unilateral action to prevent Iran from developing nuclear weapons.

"We are planning for every eventuality, and sorting out issues such as these are crucially important," said the official, speaking under condition of anonymity.

"The only way to do this is to fly through U.S.-controlled air space. If we don't sort these issues out now we could have a situation where American and Israeli war planes start shooting at each other," he said.

Contingency planning has accelerated significantly, the newspaper said, since the beginning of the year in light of Mossad estimates that Iran could have the necessary amount of fissile material to produce a nuclear weapon by 2009.

Prime Minister Ehud Olmert last week announced that Meir Dagan, head of Mossad and a leading expert on Iran, would postpone his retirement until the end of 2007 at the earliest.

Olmert also handed over coordination of military aspects of the Iran nuclear issue to Israel Air Force Commander Eliezer Shkedy.

The five permanent members of the United Nations Security Council and Germany will meet Monday in London for an emergency session on the matter. Officials will discuss arms control and a possible cutback in the $25 billion in export credits which European countries use to trade with Iran.

Iran ignored a UN deadline set for last Wednesday to stop its uranium enrichment.

This would not mark the first time IAF planes passed through Iraqi airspace. On June 17, 1981 an IAF air strike demolished the Osirak nuclear reactor being constructed under Saddam Hussein's regime.

Cheney: U.S. and allies must not allow Iran to achieve nuclear capabilityAlso Saturday, U.S. Vice President Dick Cheney said that the United States and its allies must not allow Iran to become a nuclear power and raised concerns about Tehran's actions and "inflammatory" rhetoric.

The stern comments from Cheney, who is known for his hawkish views, followed Tehran's refusal to heed the UN deadline to halt enrichment, and a vow by Iranian President Mahmoud Ahmadinejad to stand up to the rest of the world and not show weakness by acceding to the West's demands.

"They have made some fairly inflammatory statements," Cheney said of Iran at a joint Sydney news conference with Australian Prime Minister John Howard. "They appear to be pursuing the development of nuclear weapons."

"We are deeply concerned and have made it very clear we're deeply concerned about Iran's activities," he said.

Cheney said he was concerned about Iran's "fairly aggressive" role in the Middle East, not just its decision to ignore the UN deadline.

He said "all options are on the table" on Iran. The Bush administration has long maintained that it is focused on diplomacy but tacitly acknowledges that the military option has not been ruled out.

Still, the administration's tough comments on Iran have been met with concern by some in the U.S. Congress and have even rattled financial markets.

Cheney said that a peaceful resolution to the nuclear standoff with Iran was "still our preference".

The Weekend Australian newspaper reported on Saturday that Cheney had endorsed U.S. Republican Senator John McCain's view that the only thing worse than a military confrontation with Iran would be a nuclear-armed Iran.

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