The inner cabinet of Ariel Sharon, the Israeli prime minister, gave “initial authorisation” for an attack at a private meeting last month on his ranch in the Negev desert.

Israeli forces have used a mock-up of Iran’s Natanz uranium enrichment plant in the desert to practise destroying it. Their tactics include raids by Israel’s elite Shaldag (Kingfisher) commando unit and airstrikes by F-15 jets from 69 Squadron, using bunker-busting bombs to penetrate underground facilities.

The plans have been discussed with American officials who are said to have indicated provisionally that they would not stand in Israel’s way if all international efforts to halt Iranian nuclear projects failed.

Tehran claims that its programme is designed for peaceful purposes but Israeli and American intelligence officials — who have met to share information in recent weeks — are convinced that it is intended to produce nuclear weapons.

The Israeli government responded cautiously yesterday to an announcement by Condoleezza Rice, the US secretary of state, that America would support Britain, France and Germany in offering economic incentives for Tehran to abandon its programme.

In return, the European countries promised to back Washington in referring Iran to the United Nations security council if the latest round of talks fails to secure agreement.

Silvan Shalom, the Israeli foreign minister, said he believed that diplomacy was the only way to deal with the issue. But he warned: “The idea that this tyranny of Iran will hold a nuclear bomb is a nightmare, not only for us but for the whole world.”

Dick Cheney, the American vice-president, emphasised on Friday that Iran would face “stronger action” if it failed to respond. But yesterday Iran rejected the initiative, which provides for entry to the World Trade Organisation and a supply of spare parts for airliners if it co-operates.

“No pressure, bribe or threat can make Iran give up its legitimate right to use nuclear technology for peaceful purposes,” said an Iranian spokesman.

US officials warned last week that a military strike on Iranian nuclear facilities by Israeli or American forces had not been ruled out should the issue become deadlocked at the United Nations.

Additional reporting: Tony Allen-Mills, Washington