Israel warns billions unlocked by new nuclear deal will be channelled to Iranian-backed militias

Billions of pounds due to be unlocked by the proposed Iran nuclear deal will be channeled to Iranian-backed militias wreaking havoc across the region, Israel has warned.

As diplomats said an agreement may be reached this weekend, Joshua Zarka, the Israeli foreign ministry's deputy director general, said the country was "extremely troubled" by what it saw as the likely prospect of Tehran spending currently frozen funds "on arming its proxies and financing its proxies."

Mr Zarka warned that tensions between Israel and Iran in the region would "grow significantly" in the event of sanctions against Iran being lifted. Benny Gantz, Israel's defence minister, has signalled that the country is prepared to attack Iran if it is left with "no choice but to act."

Mr Zarka's intervention, in an interview with the Telegraph, comes after Simon Coveney, the Irish foreign minister and UN Security Council facilitator at the nuclear talks in Vienna, said the "signals are good" for a deal by Monday.

The agreement would see US sanctions lifted in return for Iran agreeing to salvage the 2015 deal imposing strict limits on its nuclear ambitions. As well as releasing frozen funds amounting to billions of pounds, it would pave the way for Iran to step up oil exports to Western countries currently reducing their reliance on Russian energy supplies due to Vladimir Putin's invasion of Ukraine.

Writing for the Telegraph, Liam Fox, the former defence secretary, states that the deal would simply "delay" Iran's efforts to develop a nuclear bomb, rather than prevent it from acquiring such a weapon.

Dr Fox says: "It would be complete folly if, in trying to escape from our dependency on Putin’s oil and gas, we were to end up funding the development of another nuclear state whose political stability, human rights record and disregard for international law is at least as bad as Russia."

Mr Zarka, a former senior diplomat at Israel's embassy in the US, said: "Our assessment is that a large part of the money that the Iranians will receive as a result of the agreement is going to be spent on its proxies. On arming its proxies and financing its proxies. Lebanon is in a significant crisis. The money could basically be used to allow Hezbollah to have the run of Lebanon, which is extremely troubling.

"Then we have Syria. Iran is going to double its efforts to entrench itself in Syria militarily. On the one hand Iranian militias will be encouraged because of the agreement and Iran will have much more money. Clearly the tensions between us and Iran in that region are going to grow significantly."

In Iraq, according to Mr Zarka, "there is going to be significant growth in Iranian involvement, which will result in increasing violence."

Senior figures in the UK and US fear that the agreement will be weaker than its predecessor, the 2015 Joint Comprehensive Plan of Action (JCPOA), from which Donald Trump withdrew the US in 2018, describing it as a "horrible, one-sided deal". Earlier this month, Robert Jenrick, a former cabinet minister, said the rumoured deal risked "emboldening" Tehran.