It is a measure of current international alarm that world markets should shudder yesterday on reports that an explosion near a nuclear plant in Iran might have come from a missile fired by an attacking aircraft.
This was quickly denied by Iranian spokesmen who said it happened during the construction of a dam - and immediately in Washington by Pentagon and other sources who insisted that US policy is to deal with Iran diplomatically.
Nonetheless, the flurry of alarm was stoked by several recent reports that the US is sending intelligence drones over Iran and identifying possible targets for air attacks against its nuclear facilities. It follows several warnings that the country is at the top of the Bush administration's threat list. There have also been suggestions that Iran could also be targeted by Israel. Yesterday, Iranian representatives warned that time is running out to complete negotiations with Germany, France and Britain on economic and security guarantees against which Iran would agree not to develop nuclear weapons. They were referring to next week's talks between President Bush and European leaders in Brussels. Unless the US agrees to back any such guarantees the talks are likely to fail, which would rapidly escalate the issue in weeks to come.
Yesterday, Iran's pivotal role in the Middle East region was underlined when its vice-president met the Syrian prime minister in Tehran. They pledged to set up a "common front" against regional challenges, but denied this refers to the United States. Following the murder of the former Lebanese prime minister Rafik Hariri on Monday, Syria is widely assumed to be responsible for it and will face severe pressure to withdraw from Lebanon. Its leaders stand accused by the Bush administration of facilitating the Iraqi resistance. Hariri's murder is bound to strengthen neoconservatives in Washington who want to see regime change in Syria and Iran in the belief that this will reduce pressure on Israel and weaken hostility against Mr Bush's policy to democratise the region. They are afraid the victory of Shia Islamic parties in the Iraqi elections will bolster clerical rule in Iran.
So yesterday's political and financial flurry of alarm was not irrational. Iran's policies will profoundly affect neighbouring states. Its leaders have a lot to gain from an agreement on nuclear energy. But the more they are threatened the more they feel the need to press ahead with a nuclear military programme to deter attack. The talks with Germany, France and Britain are central in this calculation of security costs and advantage. Next week's talks with Mr Bush will set the scene for a negotiated agreement or an escalation of tension with Iran.