ISRAELI REACTION

Developments in Europe are being closely watched in Israel. The Israelis are still talking of a possible military strike against Iran. However, the Jewish state has indicated it is prepared to give the UN and other international sanctions time to kick in.

That having been said, the government of Israeli Prime Minister Benjamin Netanyahu is highly sceptical that the UN sanctions go anywhere near far enough.

Israel was much more welcoming of the American's latest measures, which addressed Israel's main demand -- any sanctions targeting Iran's key energy industries. Companies in the sector have already announced they would honor the U.S. sanctions and initial indicators are that many will respect the European package approved on Monday.

"Israel welcomes the decision by EU Foreign Ministers to impose additional and significant sanctions on Iran," read a statement from Israel's Foreign Ministry.

"This measure by the EU sends a clear message to Iran, that it should abide by the demands of the international community. It indicates the price that Iran has to pay for continuing its current conduct, and signals that the international community will not acquiesce to Tehran's systematic disregard of international norms," the release continued.

The Israeli government maintains that more countries need to follow suit. Israel also wants to see the enforcement of the sanctions.

SOOTHING MEDICINE?

Meir Javedanfar, the Iranian-born head of the Israeli company MEEPAS (The Middle East Economic and Political Analysis), is of the opinion that the EU's decision is excellent news for Israel.

"The step taken yesterday by the EU is one of the most powerful and politically and economically beneficial to Israel, because war would be very costly to this country," he said.

Javedanfar did not go as far as to say that such a move negates any future military action against Iran, but the continuation of such a pattern does silence the war drums for the time being.

However, Zaki Shalom, an expert on Israeli security affairs from Ben-Gurion University of the Negev in southern Israel, is more sceptical about the likely success of the latest sanctions.

While the development is clearly welcomed from an Israeli perspective, Shalom said the Netanyahu government will only measure the sanctions by their effect on the ground. Often there is a gap between the actions approved in sanctions and their implementation and enforcement, he said on Tuesday.

In his opinion sanctions alone are unlikely to dissuade Tehran from continuing with its alleged nuclear weapons program.

"Unless (sanctions) are accompanied by a real threat, one that persuades the Iranian regime that it is really threatened and it must stop its nuclear project, I don't think they will stop the project," said Shalom.

Yet Javedanfar brought up another area, where he felt the sanctions may have a major impact on Iran's military abilities. Perhaps the most damage from the EU sanctions will be caused to the business arm of the Iranian Revolutionary Guard Corps, which is increasingly seen as being the most powerful organization in Iran today.

If the military body's finances are hard hit, it will not be able to operate effectively, argued Javedanfar.