Israel's army chief of staff says the danger posed by Saddam Hussein's regime in Iraq "does not keep me awake at night" but said he does worry about Iran's nuclear ambitions.

Israel, however, has been giving people inoculations and chemical protection kits in the event of a chemical attack by Iraq.

"The Iraqi threat does not keep me awake at night," Israeli media reported Lt. Gen. Moshe Yaalon as saying during an address to a rabbinical assembly on Sunday.

However, Yaalon warned that Saddam "would not hesitate to use nuclear weapons" if he could. Israel's attack on an unfinished Iraqi nuclear reactor in 1981 and the Gulf War prevented Iraq from developing nuclear weapons, he said.

In the event of a U.S. attack on Iraq, most senior Israeli military officers and analysts believe Iraq would attack Israel, as it did during the 1991 Gulf War with 39 Scud missiles carrying conventional warheads.

Israel refrained then from retaliating for the Scud missile strikes, under pressure from the United States, fearful that Israeli involvement would crumble the Arab coalition it formed to confront Saddam.

Israeli leaders have warned that unlike in the Gulf War, it will not hold back in the face of an attack.

Yaalon said Israel is much better prepared to protect itself than it was during the Gulf War. "We are fully capable of defending ourselves ... [Iraq] does not constitute an existential threat to Israel," he said.

But Yaalon warned that Iran posed a grave threat to Israel. "Iran openly calls for the destruction of Israel and acts by all means at its disposal, including attempts to acquire nuclear weapons, to achieve that goal," he said. It has no qualms aiding militant Palestinian organizations, as well as the Hezbollah militia in southern Lebanon, he said.

"What does cost me sleep are two things," Yaalon said, "the prospect of a hostile country attaining nuclear capability and altering the strategic balance, and the Palestinian issue."

In an Aug. 16 newspaper interview, Israeli Defense Minister Binyamin Ben-Eliezer said Israel would surely become a target during such a conflict and would consider retaliation in coordination with U.S. forces.

"We will be one of the main targets," he told the Yediot Ahronot newspaper. "What I told the Americans, and I repeat it: 'Don't expect us to continue to live with the process of restraint. If they hit us, we reserve the right of response.'"

Israel began boosting its defenses against the possibility of an Iraqi attack this month, deploying Patriot and Hawk anti-missile batteries in its southern region this month, as well as the more sophisticated Arrow anti-missile missiles in central Israel.

Last week, Israel's Cabinet decided to inoculate 15,000 security and rescue officials against smallpox in preparation for what officials said was a remote possibility of an Iraqi attack with non-conventional weapons.