Iran Nuclear Site Could Pose Test to U.S., Israel Ties

Iran's disclosure that it has been building a secret nuclear site ratchets up already simmering tensions between the Islamic Republic and Israel, raising questions about whether President Obama retains enough influence to prevent Israel from launching a preemptive military strike should Prime Minister Benjamin Netanyahu's government turn to its last resort.

Polls show Obama's popularity is waning in Israel, where some say his administration is too conciliatory toward the Palestinians. He also took a beating in the Israeli press for his speech at the U.N. on Wednesday, when he warned that "America does not accept the legitimacy of continued Israeli settlements," though Israeli officials continued to publicly praise him for his efforts at restarting peace talks.

The president made clear Friday that he remains committed to "serious, meaningful engagement with Iran" to deal with the nuclear issue through upcoming talks among Iran, Germany and the five permanent members of the U.N. Security Council.

But Israel views Iran as the world's greatest threat and continues to keep a military option on the table. If push comes to air strike, can Obama step in the middle?

Nile Gardiner, director of the Margaret Thatcher Center for Freedom at the conservative Heritage Foundation, said the U.S. president is on weak ground as the revelation over the nuclear site makes an Israeli strike appear more likely.

"He will strongly urge Israel against military action, but Israel will do whatever is in the best interest of Israeli security, and I don't think that Barack Obama will have the political capital to prevent an Israeli strike if Israel chooses to go down that route," Gardiner said.

Dan Gillerman, former Israeli ambassador to the United Nations, told FOX News Friday that Israel is prepared to take military action if sanctions don't work -- and suggested that it was prepared to act alone.

"Israel is always close to a strike, because Israel cannot afford to be asleep," Gillerman said. "Taking words from your president, yes we can. And if absolutely necessary, and if all other options are exhausted, yes we will. Israel cannot live with a nuclear Iran."

He said a strike could have grave consequences and would not be clear-cut, since some facilities are near densely populated areas. But he said the consequences of a nuclear-armed Iran would be worse than the consequences of Israeli military action.

The Israeli embassy in Washington, D.C., had no comment on the newly disclosed Iranian nuclear site.

A U.S. official confirmed to FOX News that Washington has known about the second Iranian nuclear facility since the Bush administration but wanted to be certain of the intelligence on the facility before revealing its existence. Washington wanted a "slam dunk case," the official said.

There had been no plans to go public with the information this week, in the middle of the U.N. General Assembly session in New York City. But Iran revealed the existence of its covert uranium enrichment site to the International Atomic Energy Agency after it discovered the project's secrecy had been breached by Western intelligence.

Officials said the "heavily protected, heavily disguised" facility was not operational, but with about 3,000 centrifuges was a "few months away" from going live.

After Iran told the IAEA, Obama -- along with British Prime Minister Gordon Brown and French President Nicolas Sarkozy -- demanded Iran allow international weapons monitors to inspect the facility.

But Iranian President Mahmoud Ahmadinejad remained defiant. In an interview Friday with Time magazine, he warned the United States not to pressure Iran on the issue.

"This does not mean we must inform Mr. Obama's administration of every facility that we have," he told Time. He warned that pressing the issue "simply adds to the list of issues to which the United States owes the Iranian nation an apology over. Rest assured that this will be the case. We do everything transparently."

He later said at a news conference that Western leaders will "regret" accusing Iran of hiding a nuclear facility.

He also said Israel would not dare attack Iran and that Iranians can defend themselves.

"We are not concerned (about an Israeli attack). Iran is a very big country," he said. "Much larger and bigger than what some people think and imagine. (Israel) wouldn't dare to attack Iran. We are capable of defending ourselves."

It's unclear how Israel's government will react to the disclosure, as well as Ahmadinejad's unrepentant response.

Netanyahu used his address at the United Nations Thursday to assail Ahmadinejad for his denial of the Holocaust, as well as the United Nations for giving him a platform to speak.

Shortly before he was sworn in, the Israeli prime minister told The Atlantic that Obama must prevent Iran from developing nuclear weapons or Israel may have to resort to military force.

But he also indicated that economic sanctions could work.

For instance, Gardiner said, a complete European freeze on investment in Iran would have a "devastating impact" on its economy.

Jim Walsh, an international security analyst at MIT, said that in a "bizarre way" the disclosure of the nuclear site could actually temper Israel.

He said it could give Israel confidence that Western intelligence is strong enough to identify such covert facilities, and could give the West a strong enough negotiating position to extract meaningful concessions from Iran.

"One would hope they'll realize that the jig is up, so to speak," he said. "Cooler heads are going to prevail on this, presumably."

Walsh said that despite strained relations between the U.S. and Israel currently, Israel will have to weigh its long-term relationship with the United States in pushing ahead with a military strike without U.S. consent. He suggested that a desire to retain that relationship would trump any itch to pull the trigger on a military strike.

FOXNews.com's Judson Berger and FOX News' Greg Palkot contributed to this report.