* U.S. spy report cited, though Washington signals no change
* Reports come amid Israeli debate over whether to go to war
* Obama has called for more time for diplomacy with Tehran
By Dan Williams
JERUSALEM, Aug 12 Iran has stepped up work to develop a nuclear warhead, Israeli newspapers said on Sunday, citing officials in Prime Minister Benjamin Netanyahu's government and leaked U.S. intelligence.
The front-page reports in the liberal Haaretz, a frequent Netanyahu critic, and in the conservative, pro-government Israel Hayom could intensify Israeli debate about whether to go to war against Iran - and soon - over its disputed atomic projects.
Doing so would defy appeals by U.S. President Barack Obama, seeking re-election in November, to allow more time for international diplomacy. Tehran says its nuclear ambitions are peaceful and has threatened wide-ranging reprisals if attacked.
Citing an unnamed senior Israeli official, Haaretz said a new National Intelligence Estimate (NIE) compiled by the Obama administration included a "last-minute update" about significant Iranian progress in the development of a nuclear warhead "far beyond the scope known" to U.N. inspectors.
Israel Hayom reported NIE findings that Iran had "boosted efforts" to advance its nuclear programme, including work to develop ballistic missile warheads, and said U.S. and Israeli assessments largely tallied on this intelligence.
Neither daily newspaper provided direct quotes or detailed evidence. For Haaretz, it was the second report since Thursday purporting to draw on a new NIE.
Israeli government spokesmen had no immediate comment. Asked about the reports in an Israel Radio interview, Cabinet Secretary Zvi Hauser suggested they be taken at face value.
"There is too much attribution of manipulation, which does not exist, to this or that official," Hauser said. "There are a great many things that are just as they are, for better or worse."
Washington has not commented on whether such an NIE exists. But its officials say the U.S. intelligence assessment remains that the Islamic republic is undecided on whether to build a bomb and is years away from any such nuclear capability.
Israel, widely reputed to have the region's sole atomic arsenal, sees a nuclear-armed Iran as a mortal menace and has long threatened to attack its arch-foe preemptively.
The war talk is meant, in part, to stiffen sanctions on Tehran by conflict-wary world powers. Israel and the United States have publicly sought to play down their differences.
Much of the media scrutiny has been on opposition to the war option within the Israeli cabinet, military and public, given the tactical and strategic risks involved. But opinion polls suggest support for an attack is growing.
Yedioth Ahronoth newspaper suggested on Friday that a destabilising Israeli attack on Iran before November could undermine Obama, a Democrat whose ties with Netanyahu have been testy, and help Republican rival Mitt Romney, who casts himself as a better friend of the Jewish state.
But a senior Israeli official quoted in a separate Haaretz story spoke of the question of who would head the next U.S. administration as largely irrelevant regarding Iran given Israel's belief that "we cannot place our fate in the hands of others" and "in statesmanship there are no future contracts".
That official was described by Haaretz as a "decision-maker" and veteran security figure who owns a grand piano - strong signals it was Ehud Barak, Israel's longtime, centrist defence minister. Ex-general Barak is also an accomplished pianist who has recently briefed media in his Tel Aviv penthouse.
Though the Obama administration has refused to rule out a U.S. war of last resort to deny Iran the means to make a bomb, the Israeli official quoted by Haaretz said "expectation of such a binding American assurance now is not serious".
"And if Mitt Romney is elected, history shows that presidents do not undertake dramatic operations in their first year in office unless forced to," the Israeli official said.