I've just returned from a lunch with the Israeli ambassador to the United States, hosted by the Israel Project, which reinforced just how quickly this situation could escalate into an all out war in the Middle East. The ambassador was introduced by Congressman Brad Sherman (D), who set the tone by declaring that the only way you could think Israel's actions were disproportionate were if you thought they "should be doing more." He pointed the finger of blame at Tehran, stating that the abductions wouldn't have happened without approval from the highest levels of the Iranian government.
Ambassador Daniel Ayalon gave a polished speech, accusing Iran and Syria of being behind the whole situation. He reiterated that Israel, like the Bush administration, sees no distinction between terrorists and those who harbor them. Intriguingly, his remarks implied that disengagement had failed.
But it was in the Q&A that things got interesting. He answered with a simple "yes" when asked if Israel was at war. Ayalon refused to rule out attacking Iran's nuclear facilities if the captured Israeli troops were transferred to Iran or using force to rescue them, warning Tehran and Damascus "that they were playing with fire." When news broke of the rocket attack on Haifa, he described it as a "major, major escalation" and announced that Israel had to leave its adversaries with "no capability to do what they can do." The nightmare scenario is that Israel and Iran could end up at war, which would then result in Iran launching an offensive against the U.S.-led coalition in Iraq and the whole region going up in flames.
There also has to be concern that Iran is attempting to use Israel's policy of deterrence to its own advantage. Iran believes that pushing Israel into actions such as the bombing of the Beirut airport helps achieve Iran's policy of radicalizing the whole Middle East. What is certain is that recent events have - understandably - strengthened those in Israel who favor using force to prevent Iran from developing a nuclear weapon. The only hopeful note struck by Ayalon was when he stated, "I can guarantee Iran will blink first" if the UN Security Council produces a really tough resolution. What he left unsaid was what would happen if it didn't.