"Dialogue with Iran is not necessarily negative. It it fails, it will lead to the strengthening of sanctions," said the intelligence chief, General Amos Yadlin, quoted by Haaretz.

"Dialogue is not appeasement," he said.

Top Israeli officials have in the past warned against Washington engaging in any form of dialogue with the Islamic republic and insisted a military option should not be ruled out.

But the election of Barack Obama to the US presidency has set the stage to increase international pressure on Iran to abandon its nuclear aspirations, Yadlin said.

"Iran will do anything not to be cornered in the position of Iraq or North Korea," he said at a lecture in honour of late military chief of staff Moshe Dayan.

"Iran is also very susceptible to international pressure because of the (global financial) crisis," Yadlin was quoted as saying.

Israel considers Iran its main strategic threat because of Tehran's accelerating uranium enrichment programme, which Israel and the West believe is aimed at developing nuclear weapons.

Iran insists the programme is entirely peaceful.

Earlier this month, Israeli Foreign Minister Tzipi Livni -- who hopes to become prime minister after February 10 elections -- urged US vice president-elect Joe Biden to keep up a tough line on Iran.

She has also said that dialogue with Iran "may be interpreted as a sign of weakness," in contrast to Obama's stated willingness to meet Tehran's representatives if the conditions are right.