Defenders of Israel's right to possess nuclear arms point out that it is the only country threatened with annihilation by its neighbors. An argument no less compelling is that Israel is the only country to have refrained from using, or flaunting, its alleged nuclear capability even when its back was to the wall. In calling this month for a Middle East free of unconventional weapons, the International Atomic Energy Agency was clearly pointing at Israel in an attempt to make more palatable to Muslim countries the efforts to block Iran's nuclear program. Israel, however, has demonstrated sufficiently impressive self-restraint in confronting a real-life doomsday scenario to suggest that it need not be handcuffed. ON THE fourth day of the Yom Kippur War, Israel's leaders were facing a worst-case situation more dire than any that had been envisaged in war games. Defense minister Moshe Dayan returned from Sinai before dawn to the underground war room in Tel Aviv to report the failure of Israel's counterattack on the southern front the day before. The division commanded by Ariel Sharon, one of the few generals not stunned into ineffectiveness by the surprise Egyptian-Syrian attack, had been dispatched over his objections on a pointless flanking maneuver while the remaining Israeli forces were driven back with substantial losses. On the Syrian front, the southern half of the line on the Golan had already fallen and the front commander was preparing for a possible pullback from the rest of the Heights. He ordered preparations to demolish the Jordan River bridges to prevent Syrian armored formations from following the retreating forces. The vaunted Israeli Air Force, which six years before had virtually won the Six Day War by itself, was neutralized over the battlefields by Soviet-supplied anti-aircraft missiles. Dozens of planes had already been downed. Having been caught with its reserves unmobilized, Israel was still unable to find its footing as the fourth day of fighting was about to begin. General Yisrael Tal, deputy chief of General Staff, would recall the situation years later: "The war was perceived at that point not just as desperate, but as a war for our physical and national existence - nothing less." Gripped by that black vision, Dayan, Israel's military icon, was warning those about him that "the Third Temple is in danger." The first two temples in Jerusalem had been destroyed by the Babylonians and Romans in antiquity. The Third Temple was an analogy for the modern state of Israel. Prime minister Golda Meir listened to Dayan's words "in horror." In her memoirs, she would write: "If I hadn't learned during all those years how to be strong, I would have gone to pieces then." So desperate was the situation that Dayan proposed distributing anti-tank weapons to civilians in Israel's heartland in case the Arabs broke through. On that fourth morning, as IDF chief of General Staff David Elazar reviewed options with his generals, one of them suggested resorting to "special means," according to published reports. This term is generally taken to mean unconventional weapons. General Rehavam Ze'evi, who would years later found a right-wing party, supported the idea. However, the proposal was vigorously opposed by Tal and by Gen. Aharon Yariv, the former military intelligence chief serving then as an adviser. Elazar, whose steadiness was one of Israel's major assets in the war, let the suggestion die. Within hours, the tide on the Golan began to turn in the fiercest tank battles since the Second World War. Israel was spared a possibly ultimate moment of truth. IT CAN be presumed that any nation possessed of unconventional weapons would give at least a passing thought to their use if it senses existential danger. The fact that Israel did not even threaten their use in its darkest hour reflects a sense of responsibility that negates any equation with Iran, which has threatened Israel's annihilation even before it has a nuclear bomb. Although refraining from employing "special means," the Israeli high command did decide on a far-reaching measure that morning - an air strike against Syrian military headquarters in Damascus. It was Syria which particularly concerned the high command, since Syrian tanks had already reached within sight of the Kinneret while the Egyptians would have had to cross the Sinai to reach the Israeli border. Prime minister Meir at first opposed any bombing of a city for fear of retaliation against Israeli urban centers. She was finally persuaded by her principal non-military adviser, minister-without-portfolio Yisrael Galili, that the Syrians had best be reminded of their vulnerability in order to deter them from trying to send armored divisions across the border. But Meir insisted that civilian targets be avoided. The attack by seven Phantoms, carried out that afternoon, severely damaged one wing of the headquarters building. Unknown to the attacking pilots, Israeli pilots who had been shot down in previous days were being interrogated in the basement of the other wing at the time. Several bombs fell short, damaging a Soviet information center and killing Soviet personnel. Two days later, the planes returned to bomb an orchard outside Damascus beneath which were bunkers housing the Syrian Air Force operations center. Nobel Prize-winning scholar Thomas Schelling has cited four instances in which a country possessing nuclear weapons might have been tempted to use them against a non-possessor but did not: the early stages of the Korean War, Vietnam, the Yom Kippur War and the Soviet war in Afghanistan. Of these, he suggests, the most impressive example of restraint was Afghanistan since the Soviets, never suspected of squeamishness, proved willing to lose a humiliating war rather than play their nuclear card. However, Israel was not contemplating defeat in a foreign adventure but confronting its own mortality. Given its record and its neighborhood, Israel deserves the comfort of a discreet weapon of truly last resort. The writer is a former Jerusalem Post correspondent. The paperback edition of his book The Yom Kippur War has just been published.