We now know that there was an Israeli air strike in Northeastern Syria near Dayr az Zawr on September 6, when Israeli commandos seized some nuclear material of North Korean origin during a raid, according to sources in Washington and Jerusalem. The attack was launched with U.S. approval, after seeing evidence of nuclear-related materials there. This event is the main reason behind soaring crude oil prices reaching $84 per barrel last week. Syria has protested to the United Nations, but it is not clear how they can defend themselves if they co-operated with North Korea on the importation of nuclear materials to use against their arch-enemies in Israel.

From what we know so far, a ship from North Korea docked at the Syrian port of Tartus and delivered containers, which Israel believes held nuclear materials. Officially, Syria says the North Korean ship contained cement, which virtually no one believes. Three days later, Israel carried out its boldest attack against nuclear threats since its 1981 air raid against Iraq's Osirak nuclear complex. It remains unclear what the U.S.'s role was, but it is widely believed that the U.S. shared its intelligence with Israel after watching the North Korean ship via satellite. The biggest irony is that North Korea may have been shipping nuclear equipment to Syria while it was simultaneously promising to dismantle its own nuclear program.

Last week, it was also reported that President Bush quietly warned North Korea against supplying nuclear know-how to Syria. One thing is absolutely clear: Don't mess with Israel. If there is any suspected nuclear material that Israel believes is a threat, it will strike. In addition, the new U.S.-made Predator drone, costing over $60 million per plane, can carry the payload of an F-18 and is ideal for taking out Iran's nuclear facilities. It is unclear if the U.S. is providing Israel with any drones--but it really doesn't matter, since if Israel strikes Iran, the U.S. will be blamed anyway.

Tensions remain extremely high in the Middle East due to Iran's and Syria's nuclear ambitions. On Wednesday, another anti-Syrian member of Lebanon's parliament was killed in a massive car bombing, likely sponsored by Iran. Iran's proxy war with Israel by arming Hamas and Hezbollah in Syria is clearly escalating. Additionally, the Iranian Revolutionary Guard is training and equipping Shiite extremist militias to fight U.S. coalition forces in Iraq near the Iranian border.

Iran's loony President, Mahmoud Ahmadinejad, is visiting the United Nations in New York. Here and elsewhere, he has been sending the following message: If anyone dares attack our nuclear facilities, we will fully activate our proxies, unleashing unrestrained destruction on Israel, killing moderate Arabs and Iraqis acting to support U.S. interests. Additionally, if Iran mines the Straits of Hormuz, Iran could cause an acute oil crisis and worldwide recession. Iran has moved world attention to Syria, since Iran apparently needs more time (perhaps two years) to develop a nuclear bomb. Iran believes that once it goes nuclear, it will become the regional superpower that no one would mess with. For leverage, Iran's proxy armies in Gaza, Lebanon, Syria and Iraq stand ready to attack Israel and U.S. forces in Iraq if anyone dares to stop Iran's nuclear ambitions.

Iranian President Ahmadinejad's appearance at Columbia University caused a big stir yesterday. Ahmadinejad has repeatedly stated that United Nations Security Council sanctions will not stop Iran's nuclear ambitions. Meanwhile, the U.S. has been waiting for the Iranian people in various internal opposition groups to stop President Ahmadinejad's apocalyptic folly.

Israel has no patience at all, and the U.S. is rapidly losing its patience. A U.S. naval blockade on Iran is possible. In the interim, French President Sarkozy is talking about war. All this rhetoric makes the Iranian president's U.S. visit and the United Nation's general assembly very controversial. The resulting tension will almost certainly keep crude oil prices high. In addition, three of my favorite Israeli stocks in my Global Growth service, Ceragon Networks Ltd. (CRNT), BluePhoenix Solutions Ltd. (BPHX) and Alvarion Ltd (ALVR), each rose strongly (+8.5% on average) last week, as the increased perception of greater Israeli security always tends to help our Israeli stocks.