Iran has drawn back from its ambitions to build a nuclear weapon, Israel's defense minister was quoted as saying on Tuesday, while warning that his country may still have to decide next year whether to launch a military strike against it.

Tehran denies its nuclear work has any military dimensions but governments in Europe and the United States are increasingly concerned over its intentions.

Diplomacy and successive rounds of economic sanctions have so far failed to end the decade-old row, raising fears of Israeli military action against its arch-enemy.

Defense Minister Ehud Barak told Britain's Daily Telegraph newspaper that an immediate crisis was avoided when Iran chose to use more than a third of its medium-enriched uranium for civilian purposes earlier this year.

He told the paper that the decision "allows contemplating delaying the moment of truth by eight to ten months".

Eoin Treacy's view The declining risk premium attached to the possibility of an Israeli attack on Iran removes a tailwind from Brent crude prices and may have contributed to recent weakness. A sustained move above $110 would be required to question the current downward bias.

This declining risk premium may have also contributed to the recent resurgence in Middle Eastern stock market indices. While Saudi Arabia remains closed for the Eid holiday it rallied impressively last week. A sustained move below 6630 would be required to question potential for some additional higher to lateral ranging.

Israel has been ranging below 1100 in a steady unwind of its short-term oversold condition. A sustained move above that area would confirm a return to demand dominance beyond the short term.

Egypt has been the regional leader. The Hermes Index has been ranging below 600 since late September in a gradual process of mean reversion. A sustained move below the 200-day MA, currently near 520 would be required to question potential for successful reassertion of the medium-term uptrend.

Following a steep decline from the 2008 peak near 5000, the Jordanian market has lost downward momentum and rallied impressively this week. A sustained move above 1950 and the 200-day MA would suggest a return to medium-term demand dominance.

Oman has found support in the region of 5400 on a number of occasions over the last two years and has held a progression of higher reaction lows since August. A sustained move below 5630 would be required to question potential for continued higher to lateral ranging.

Qatar has been trading in a range between 8000 and 9000 since early 2011 and a sustained move above the later area is required to confirm a return to medium-term demand dominance.