"Iran must respond to restore deterrence and maintain credibility among its Resistance Front allies. But on the other hand, retaliating to restore deterrence would likely bring an even greater, and more destructive Israeli response, likely with US assistance," he said.
The Iranian sources said the United States had asked Iran to exercise restraint and allow space for diplomacy, cautioning Tehran that in the event of a direct attack it will stand by Israel.
Iran believes Netanyahu aims to draw Tehran into a war; therefore its retaliation could be a restrained one that avoids direct strikes on Israeli territory and may draw on Tehran's allies.
Reportedly, the US Middle East envoy has called the foreign ministers of Saudi Arabia, UAE, Qatar and Iraq to ask them to deliver a message to Iran urging it to lower tensions with Israel.
A source familiar with the issue said the US might well agree to revived nuclear talks if that could prevent a conflagration.
“If we are talking about talks and not (about) reaching an agreement, then it would seem to be well worth the price if the payoff is minimizing the risk of a regional escalation into which the US would be dragged,” said the source, who spoke on condition of anonymity.
Ali Vaez of International Crisis Group said Iran’s dilemma was "to figure out how to retaliate in a way that it saves face without losing its head".
"Israel is much more unpredictable than the US," he said. "The Supreme Leader is clearly concerned that rather than delivering the deterrent effect he might hope to achieve, an attack on Israel may only fuel a counter-escalation he might have hoped to avoid."