As expected, Iran is annoyed with the International Atomic Energy Agency's Tuesday report stating serious concerns about its clandestine program aimed at developing nuclear warheads.

President Mahmoud Ahmadinejad retorted to the U.N. nuclear watchdog's assessment on state television, declaring that Iran would not retreat one iota from its nuclear program.

He called on the IAEA to conduct similar reviews of the U.S. nuclear stock instead of producing untrue reports on Iran, according to his government's Fars News Agency. Unfortunately, there is someone in charge of the IAEA who not only has no authority but tramples upon the IAEA laws and only echoes the U.S. words, said Ahmadinejad Tuesday.

Already a target of four U.N. sanctions resolutions and numerous unilateral penalties from several nations, Iran's diplomatic relations are expected to deteriorate even further with the IAEA evaluation.

French Foreign Minister Alain Juppe warned in a statement: If Iran refuses to conform to the demands of the international community and refuses any serious cooperation, we stand ready to adopt, with other willing countries, sanctions on an unprecedented scale.

While many nations have grown hostile to Iran over the undercover nuclear warheads program, Israel's stand in particular has set the alarm bells ringing.

Even before the IAEA report was out, it was reported that the Israeli Cabinet officials were being prodded by Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak to authorize the potential use of armed force against Iran's nuclear infrastructure, according to a Haaretz report.

International observers say the IAEA report could be a critical factor in deciding Israeli military action against Iran.

The Israeli Air Force has been carrying out exercises involving the use to fighter aircraft, fuel tankers and surveillance systems for quite some time now, with the most recent one conducted last month at a NATO base in Italy, Haaretz reported.  

But the Israeli strategists favor a U.S. strike against Iran rather than a military move from their own country, said Israeli Strategic Affairs Minister Moshe Yaalon. A military move is the last resort, he added.

Deputy Prime Minister Dan Meridor has also voiced his support for U.S. involvement.

It's clear to all that a nuclear Iran is a grave danger and the whole world, led by the United States, must make constant efforts to stop Iran from obtaining nuclear weapons, Meridor said last month.

Many Israeli officials, however, are still nervous about the potential consequences of an attack on Iran.

This is a complicated time and it's better not to talk about how complicated it is. This possible action is keeping me awake at night, Interior Minister Eli Yishai said last week. Imagine we're (attacked) from the north, south and center. They have short-range and long-range missiles -- we believe they have about 100,000 rockets and missiles.

But Barak clearly hinted that Israel may not necessarily wait for U.S. action if the need for an immediate move arose. A situation could be created in the Middle East in which Israel must defend its vital interests in an independent fashion, without necessarily having to rely on other forces, regional or otherwise, Barak told his nation's legislature, the Knesset, last week.

Iran-Israel relations have been that of absolute hostility ever since the 1979 Islamic Revolution led by Ayatollah Ruhollah Khomeini.

In February 2010, his successor, Ayatollah Ali Khamenei, said the destruction of Israel was assured. According to the Teheran Times, Khamenei told Palestinian Islamic Jihad leader Ramadan Abdullah Shallah: Israel is going downhill toward decline and fall and God willing its obliteration is certain. Khamenei went on to call Israel a symbol of atrocity, viciousness, and ugliness, and said the West's support for the Zionist regime is ineffective.

Ahmadinejad's chief of staff, Esfandiar Rahim Mashaei, said in May 2010, that if Israel attacked Iran, it would be destroyed within a week. His exact threat was: Zionists will have no longer than a week to live.