Defense Minister Ehud Barak says Israel would accept an Iranian reduction in nuclear enrichment to 3.5 percent in accordance with a proposal by the P5+1.
Israel's official position is that Iran must halt all enrichment, but most analysts say it doesn't represent a viable negotiating stance.
Barak and Prime Minister Binyamin Netanyahu are the key Israeli officials pushing for military action against Iran, and Barak's statements are believed to represent some flexibility on Netanyahu's part.
However, analysts say Israel will almost certainly insist all enrichment activities at the nearly impentetrable Fordow facility near Qom be halted entirely as a part of any agreement with Iran over its controversial nuclear program.
Iran also enriches uranium at the Natantz site. However – while Natantz has been fortified – both Jerusalem and Washington have the military capacity to neutralize it with relative ease.
Barak's statement came after Netanyahu succeeded in forging a 94-seat "super-coalition," which is believed to have strengthened his hand both domestically and in Washington for dealing with Iran.
And, those beliefs appear to be borne out in the offer the P5+1 — the five permanent members of the UN Security Council plus Germany — plan to make Iran in Baghdad on Wednesday.
Sources say the P5+1 will demand Tehran stop enriching uranium to 20 percent; move all 20 percent enriched uranium out of the country; and stop all nuclear activity at Fordow.
Including Fordow is widely believed by international observers to be a nod from the P5+1 to Israel.
The P5+1 is also expected to demand "full transparency" and "permanent human monitoring" by the UN nuclear watchdog at Iran's key nuclear sites, as well.
In exchange, the P5+1 will aid Iran in operating a small reactor that can be used for medical research isotopes, and will not push for further U.N. sanctions.
However, the P5+1 is not expected to ease the European Union embargo on Iranian oil set to go into effect July 1 — which analysts say is key for Tehran.
The embargo will reduce Iran’s already impacted oil exports by 500,000 barrels a day — and will likely remain in place until Tehran not only reaches an agreement, but demonstrates compliance with it.
The G8 countries over the weekend said they have no intention to give Iran what is most important to it without a suitable agreement in place.
Barak's statement that Israel is willing to compromise shifts the onus to Iran in Baghdad and gives them a plausible way out of the international sanctions that are crippling the Islamic Republic's economy.
Analysts say, if Iran chooses to press on with its nuclear program despite Israel showing flexibility and backing a fair offer – then an Israeli military strike is much harder to criticize should it be launched.