The European Union could impose sanctions on Iran if efforts to take the Islamic republic to the United Nations Security Council fail, warned Austrian Ambassador to Israel Kurt Hengl, whose country assumes the EU presidency Sunday. "If Iran, instead of saying, 'We want to talk,' says, 'We don't need to talk, do what you want,' Europe will have to do something," Hengl told The Jerusalem Post. Meanwhile, according to German media reports, the US Administration is preparing its NATO allies for a possible military strike against suspected nuclear sites in Iran in the New Year. The Berlin daily Der Tagesspiegel last week quoted "NATO intelligence sources" as claiming that the NATO allies had been informed that the United States is currently investigating all possibilities of bringing the mullah-led regime into line, including military options. Referring to European efforts to rein in Iran's nuclear development program, the Austrian envoy told the Post that Algeria could potentially block Security Council action. "It is enough if sanctions are imposed by the European Union," he added. Europe could use its status as a major trading partner with Iran as diplomatic leverage. The United States, which already has imposed various sanctions against Iran, has been enlisting allies to clamp down trade restrictions should the UN prove ineffective. At the same time, Hengl urged Israel not to attack Iran. "Israel should not do it," Hengl said, in what he qualified as his personal opinion. "Whatever the outcome is, it will not increase sympathy for Israel, not in the area, not in Europe, and not in the world." He continued that it was "contrary to international law" because Iran's capabilities are unknown. "Can Israel prove that what Iran has, or will have perhaps, is a threat toward Israel?" Hengl asked. "If it's a threat toward the world community, people will say, 'Excuse me, why do you make yourself so important? Why don't you wait for more?' Any action taken," he added, "should be done by a larger group." He also noted that Israel is in the midst of elections and some of the rhetoric on Iran should be understood in this context. The EU itself has been focused on the Palestinian elections, and contributed to the Quartet statement last week calling for a Hamas-free Palestinian Authority, though it didn't refer to the terror organization by name. (The Quartet is composed of the EU, US, UN and Russia.) Noting Europe's role as the leading financial backer of the Palestinians, Hengl described the declaration as "a warning to the Palestinians that they don't chop down the tree on which they're sitting." Having militant groups sitting in governments complicates Europe's efforts on the one hand to discourage violence but on the other hand to continue to have dialogue with Middle Eastern governments, he explained. The issue has been one of the chief factors to keep Hizbullah off Europe's terror list, despite Israeli protestations, Hengl said. "According to what I am looking at from here, it seems to me that Hizbullah is a candidate for being put on Europe's terror list, but I don't have all the insight to which our people in Brussels and our political and security directors have." He also noted that groups aside from Hizbullah often take responsibility for attacks, which complicates the proper assigning of blame, which can also happen after Palestinian attacks. Even so, he said, Palestinians must act against terror. "I think it's impossible to speak of Israel [making] one-sided concessions when a young officer is blown up in Tulkarm." Still, Hengl indicated that Europe questions the security issues Israel has raised in connection with the convoys scheduled to run between the Gaza Strip and the West Bank. He pointed out that they will be limited to a handful of buses, searched and then accompanied by the IDF. "Let it start," he said. "We could not imagine that there is a real security problem." In any case, the willingness of Israel to have EU monitors stationed at the Rafah border between Gaza and Rafah as part of the same crossing agreement has contributed to a "fantastic improvement" in EU-Israel relations. He also stressed the positive effect of Israel's withdrawal from Gaza. "The triggering of this is definitely the disengagement from Gaza. For Europeans, the fact that you hold onto the Gaza Strip, with 1.5 million Arabs who don't want to see you, and for me personally, to see that there are young Israeli soldiers being killed there, just for what, for tomatoes and flowers to be shipped to Europe? It is a difficult position." He recalled being overwhelmed when Prime Minister Ariel Sharon told a meeting of European officials that it had been a mistake to settle Gaza. "I said, my God, who is this? Is this our dear prime minister?" The change in Sharon is just one of many evolutions Hengl has observed since his first tour here during the Yom Kippur War, during which he tracked the IDF's advances on a map that still hangs on the wall of his Ramat Gan office. "It was really like an annex of good old Europe. A lot of people were speaking German," he related, though he recounted that at that time his neighbors in Tel Aviv wouldn't speak to him in German because of their association of the Austrian government with the Holocaust. He described Israel now as much more "Mediterranean." But the country has remained European enough to make Israel the only true partner in the EU's neighborhood program to develop stronger ties with non-European Mediterranean countries. Israel, he said, "is the only country with which Europe really wants to have a full-speed approach, in technology, in research, in human rights, in democracy, in all that modern life is. "The contacts and the mutual interests are not only much closer, but [Israel is] the only country in a certain way... which is very much European," he explained.