Countries Warn Military Action as Iran Nuke Standoff Continues Saturday, January 21, 2006 •JERUSALEM — Israel's defense minister hinted Saturday that the Jewish state is preparing for military action to stop Iran's nuclear program, but said international diplomacy must be the first course of action. "Israel will not be able to accept an Iranian nuclear capability and it must have the capability to defend itself, with all that that implies, and this we are preparing," Shaul Mofaz said. His comments at an academic conference stopped short of overtly threatening a military strike but were likely to add to growing tensions with Iran. Germany's defense minister said in an interview published Saturday that he is hopeful of a diplomatic solution to the impasse over Iran's nuclear program, but argued that "all options" should remain open. Asked by the Bild am Sonntag weekly whether the threat of a military solution should remain in place, Franz Josef Jung was quoted as responding: "Yes, we need all options." French President Jacques Chirac said Thursday that France could respond with nuclear weapons against any state-sponsored terrorist attack. Iranian Foreign Ministry spokesman Hamid Reza Asefi said Saturday that Chirac's threats reflect the true intentions of nuclear nations, the official Islamic Republic News Agency reported. "The French president uncovered the covert intentions of nuclear powers in using this lever (nuclear weapons) to determine political games," IRNA quoted Asefi as saying. Israel long has identified Iran as its biggest threat and accuses Tehran of pursuing nuclear weapons. Iran says its atomic program is peaceful. Iran broke U.N. seals at a uranium enrichment plant Jan. 10 and said it was resuming nuclear research after a 2 1/2-year freeze. Germany, France and Britain said two days later that talks aimed at halting Iran's nuclear progress were at a dead end and called for Iran's referral to the U.N. Security Council. The International Atomic Energy Agency, the U.N. nuclear watchdog, will meet Feb. 2 to discuss possible referral. Israel's Mofaz said sanctions and international oversight of Iran's nuclear program stood as the "correct policy at this time." In Germany, Jung called himself "confident that there will be a diplomatic solution in the case of Iran." Israeli leaders have also repeatedly said they hope the crisis can be resolved through diplomacy, and they said any military action would have to be part of an international effort. They have denied having plans for a unilateral preventive strike. Russian President Vladimir Putin has said Tehran might still agree to Moscow's offer to move its uranium enrichment program to Russia, a step backed by the United States and Europeans as a way to resolve the deadlock. Israel's concerns about Iran have grown since the election of Iranian President Mahmoud Ahmadinejad, who said last year that Israel should be "wiped off the map." On Friday, Iran's Students News Agency reported Friday that Central Bank governor Ebrahim Sheibani said Iran had begun moving its foreign currency reserves from European banks and transferring them to an undisclosed location as protection against possible U.N. sanctions. Sheibani backed away Saturday from his statement that the transfers were already underway, and Iran's Central Bank said there had been no change in its currency policy. Estimates put Iranian funds in Europe at as much as $50 billion.