Israel urges Iran oil embargo even without U.N. okay

Israel's Prime Minister Benjamin Netanyahu attends a special cabinet meeting in Tel Hai near the northern Israeli town of Kiryat Shmona February 21, 2010.

JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu called on Monday for an immediate embargo on Iran's energy sector, saying the U.N. Security Council should be sidestepped if it cannot agree on the move.

Iran's uranium enrichment in defiance of several rounds of Security Council sanctions has spurred world powers to consider tougher measures to halt what the West fears is a covert nuclear weapons drive.

Iran denies any seeking to build an atomic bomb and says it only wants to uranium enrichment to generate electricity and medical isotopes.

Many analysts doubt enough pressure could be mustered to make Tehran yield. Israel has backed the talks while hinting at pre-emptive military action should it deem diplomacy a dead end.

If the world "is serious about stopping Iran, then what it needs to do is not watered-down sanctions, moderate sanctions ... but effective, biting sanctions that curtail the import and export of oil into Iran," Netanyahu said in a speech.

"This is what is required now. It may not do the job, but nothing else will, and at least we will have known that it's been tried. And if this cannot pass in the Security Council, then it should be done outside the Security Council, but immediately."

Though it is the world's fifth-largest oil exporter, Iran imports some 40 percent of its gasoline from foreign refineries.

Western diplomats believe that China, along with fellow veto-wielder Russia, would block any Security Council sanctions targeting Iran's energy sector. Proposed sanctions for now focus on Iranian government assets like the Revolutionary Guard Corps.

Netanyahu spokesman Mark Regev said Israel would prefer the Security Council to curb Iran but believed there was enough international support outside that forum for energy sanctions.

MAXIMALIST

Mark Fitzpatrick, proliferation analyst at the International Institute for Strategic Studies in London, saw an Israeli gambit to boost the impact of more feasible, forseeable sanctions.

"He (Netanyahu) is taking a typically maximalist approach, hoping that it will pull the Europeans in his direction," Fitzpatrick said, predicting Western powers would divest further from Iran's energy sector but stop short of a refinement ban.

"It would be impossible to impose a complete ban given... the potential for many companies whose countries do not accept the ban to step in," he said.

European sanctions against Iran's shippling lines would also hurt its oil exports, Fitzpatrick said.

Netanyahu has in the past predicted energy sanctions would be enough to "cripple" Iran. He appeared to demur on Monday by raising the prospect that Iran -- which announced plans to build two new enrichment plants -- could weather even an oil embargo.

Regev said Netanyahu was speaking extemporaneously in his English address to diaspora Jewish leaders, and that there was no change to Israel's strategic view on its arch-foe.

But Tehran's anti-Israel rhetoric and support for Islamic guerrillas on the Jewish state's borders, as well as concerns over an Israeli military strike, have stirred concern.

Netanyahu made no reference to the possibility that Israel, assumed to have the Middle East's only atomic arsenal, would try to attack Iran's nuclear facilities. Some analysts believe this option is circumscribed by the long ranges, Iranian defences and U.S. reluctance to see another regional conflict.

Netanyahu discussed Iran on a visit to Moscow last week. His deputy, Moshe Yaalon, and Bank of Israel Governor Stanley Fischer will travel to China -- a top consumer of Iranian crude -- at month's end to lobby for tougher sanctions against Tehran.

(Additional reporting by Jeffrey Heller; Editing by Jon Boyle)