Saudi Arabia has denied a report it was prepared to allow Israeli warplanes to use its airspace to attack Iran's major nuclear installations.

But the report by The Sunday Times of London isn't as far-fetched as it might appear.

Amid growing alarm caused by Iran's alleged quest for nuclear weapons and fears of a new war between Israel and the Lebanese movement Hezbollah, Iran's main proxy, that could spiral out of control and drag in the Persian Gulf states as well, the old political shibboleths are shifting.

Saudi Arabia and the Arab states in the Persian Gulf are mortally afraid of being swept into the turmoil and increasingly are being drawn into an undercover battle against Iranian intelligence.

The uncovering of an alleged Iranian spy ring in Kuwait in May, its links to Bahrain, and the 2009 discovery of a large Hezbollah network in Egypt plotting to attack the Suez Canal, a strategic logistics link for Western forces heading to the gulf, underline the extent of this confrontation.

This has made for some bizarre situations, with secret dealings between Israel and its longtime Arab adversaries, largely through their intelligence services but increasingly at a diplomatic level as well.

In part, this is the result of efforts by Washington to persuade moderate Arab leaders to normalize relations with Israel to establish a united front against Iran's perceived expansionism.

The Saudis and their gulf partners are extremely vulnerable to Iran's growing ballistic missile force, which is controlled by the Revolutionary Guards.

They fear the Americans aren't prepared to use military force against the Islamic Republic.

These gulf states have spent tens of billions of dollars on buying U.S., British and French weapons over the last two decades but their military forces have never fought a full-blown conventional war against a major power such as Iran, despite their limited participation in the 1990-91 Gulf War.

So it's no surprise they would encourage Israel to take unilateral action against Iran and launch pre-emptive strikes, with strike jets or ballistic missiles.

The moderate Arab states, all Sunni Muslim-dominated states, thus have shared strategic interests with Israel in preventing Shiite Iran from seizing regional dominance.

There are those in Israel who also see beyond the Jewish state's conflict with the Palestinians and envision a strategic link with Saudi Arabia.

In November, the liberal Israeli daily Haaretz published an op-ed article by analyst Yehezkel Dror under the headline: "An Israeli ambassador in Riyadh." Dror argued that "Israel is in need of a new diplomatic paradigm" if it wants peace with the Arabs as a whole, not just the Palestinians or the Syrians.

"The Israeli peace plan must be shaped to meet the interests of the rulers of the moderate Arab states, as well as the Asian Islamic states and the superpowers," he wrote.

Last summer, Israeli officials reported feelers from some of the six member states of the Gulf Cooperation Council -- Saudi Arabia, the United Arab Emirates, Kuwait, Oman, Qatar and Bahrain -- to discuss a joint strategy toward Iran.

With the exception of tiny Qatar, which pursues an independent foreign policy, the GCC states have made little secret of their alarm about Iran's power and ambitions.

Israeli officials say GCC representatives have voiced profound concern about U.S. President Barack Obama's reluctance to get tough with Iran.

Michael Herzog, chief of staff to Israeli Defense Minister Ehud Barak, disclosed he had met "a very prominent figure" from a GCC state.

"We're on the same side," Herzog quoted the unidentified man as as saying. "We feel threatened by the Iranian nuclear project, by their political ambitions, by their subversion."

Herzog told a May 2009 briefing at the Washington Institute for Near East Affairs he'd had similar discussions with officials from Egypt, Jordan and North Africa. These countries view Hezbollah and Hamas as proxies of Iran and condone Israeli military actions against them even if their governments publicly condemn those actions.

Efram Inbar, director of the Begin-Sadat Center for Strategic Studies near Tel Aviv, says Arab allies of the United States are prepared to cooperate with Israel to block Iranian ambitions.

"It's hard to believe that the State Department does not understand that the moderate Arab states will cooperate to stop Iran from acquiring a nuclear bomb regardless of the Palestinian issue," Inbar said.