JERUSALEM – For the first time in nearly two decades of escalating tensions over Iran’s nuclear program, world leaders are genuinely concerned that an Israeli military attack on the Islamic Republic could be imminent — an action that many fear might trigger a wider war, terrorism and global economic havoc.

High-level foreign dignitaries, including the U.N. chief and the head of the American military, have stopped in Israel in recent weeks, urging leaders to give the diplomatic process more time to work. Israel seems unmoved, and U.S. Defense Secretary Leon Panetta has reportedly concluded that an Israeli attack on Iran is likely in the coming months.

U.S. President Obama said Sunday he does not think Israel has decided whether to attack Iran, telling NBC News in an interview that the United States was “going to be sure that we work in lockstep as we proceed to try to solve this — hopefully diplomatically.”

Despite harsh economic sanctions and international pressure, Iran is refusing to abandon its nuclear program, which it insists is purely civilian, and threatening Israel and the West.

It’s beginning to cause jitters in world capitals and financial markets.

“Of course I worry that there will be a military conflict,” Britain’s deputy prime minister, Nick Clegg, said in a magazine interview last week. He said Britain was “straining every single sinew to resolve this through a combination of pressure and engagement,” rather than military action.

Is Israel bluffing? Israeli leaders have been claiming Iran is pursuing nuclear weapons since the early 1990s, and defense officials have issued a series of ever-changing estimates on how close Iran is to the bomb. But the saber-rattling has become much more direct and vocal.

Prime Minister Benjamin Netanyahu frequently draws parallels between modern-day Iran and Nazi Germany on the eve of the Holocaust.

On Thursday, Defense Minister Ehud Barak claimed during a high-profile security conference that there is a “wide global understanding” that military action may be needed.

“There is no argument about the intolerable danger a nuclear Iran (would pose) to the future of the Middle East, the security of Israel and to the economic and security stability of the entire world,” Barak said.

A day earlier, visiting U.N. Secretary-General Ban Ki-moon implored Israel to find a peaceful solution to the nuclear standoff.

Israel views Iran as a mortal threat, citing Iranian calls for Israel’s destruction, Iran’s support for anti-Israel militant groups and Iranian missile technology capable of hitting Israel.

On Friday, Iran’s supreme leader, Ayatollah Ali Khamenei, called Israel a “cancerous tumor that should be cut and will be cut,” and boasted of supporting any group that will challenge the Jewish state.

When faced with such threats, Israeli has a history of lashing out in the face of world opposition. That legacy includes the game-changing 1967 Middle East war, which left Israel in control of vast Arab lands, a brazen 1981 air strike that destroyed an unfinished Iraqi nuclear reactor, and a stealthy 2007 air strike in Syria believed to have destroyed a nuclear reactor under construction.

Armed with a fleet of ultramodern U.S.-made fighter planes and unmanned drones, and reportedly possessing intermediate-range Jericho missiles, Israel has the capability to take action against Iran, though it would carry grave risks.

With targets some 1,000 miles away, Israeli planes would likely have the complicated task of refueling in flight. Iran’s antiquated air force, however, is unlikely to provide much of a challenge.

Many in the region cannot believe Israel would take such a step without a green light from the United States, its most important ally. That sense is deepened by the heightened stakes of a U.S. election year and the feeling that if Israel acts alone, the West would not escape unscathed.

The U.S. has been trying to push both sides, leading the charge for international sanctions while also pressing Israel to give the sanctions more time. In recent weeks, both the U.S. and European Union have imposed harsher sanctions on Iran’s oil sector, the lifeblood of its economy, and its central bank. Israeli officials say they want the sanctions to be imposed faster and for more countries to join them.

Even a limited Israeli operation could well unleash region-wide fighting. Iran could launch its Shihab 3 missiles at Israel, and have its local proxies, Hezbollah in Lebanon and Hamas in the Gaza Strip, unleash rockets. Israel’s military intelligence chief, Aviv Kochavi, warned last week that Israel’s enemies possess some 200,000 rockets.

To some, the greatest risk is to the moribund world economy.

Analysts believe an Israeli attack would cause oil prices to spike, since global markets so far have largely dismissed the Israeli threats and not “price in” the threat. According to one poll conducted by the Rapidan Group, an energy consulting firm in Bethesda, Md., prices would surge by $23 a barrel.

“Traders don’t believe there’s anything but bluster going on,” said Robert McNally, president of Rapidan and an energy adviser to former President George W. Bush.

McNally said Iran could rattle oil markets by targeting oil fields in southern Iraq or export facilities in Saudi Arabia or Qatar — and withhold sales of its own oil and natural gas from countries not boycotting.

Iran also could attempt to carry out its biggest threat: to shut the Strait of Hormuz, a strategic waterway through which a fifth of the world’s oil passes. That could send oil prices soaring beyond $200 a barrel. But analysts note Iran’s navy is overmatched.

If a surge in oil prices proved lasting, financial markets would probably plummet on concerns that global economic growth would slow and on the fear that any conflict could worsen and spread.