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Israel has warned visiting U.S. Defense Secretary Leon Panetta that time is running out for a peaceful settlement to the nuclear dispute with Iran.

Speculation is rampant over whether Israel will consider a military strike against Iran to halt its nuclear development programme. The West suspects Iran of developing nuclear weapons.

Tehran maintains its nuclear program is entirely peaceful. Panetta has assured Israel, the United States will not allow Iran to develop a nuclear bomb but stresses that military action would only be possible after all other options had been exhausted.

US President Barack Obama has announced approved funding of 70 million dollars for a new mobile defense system to protect Israel against short range rockets and artillery attacks.

On Tuesday, he announced new U.S. sanctions against foreign banks that help Iran sell its oil.

Xinhua

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