The uncertainty facing Israel was evident Sunday in the reactions among its leaders, who welcomed the signs of change in Iran while also warning the world should not be fooled.
"Let us not delude ourselves.
Rowhani swept to a landslide victory in Friday's election with a call for outreach and dialogue with the international community. His predecessor, Mahmoud Ahmadinejad, repeatedly clashed with the West over the nuclear issue, isolating the country and drawing several rounds of painful economic sanctions. Rowhani's victory was widely seen as a show of discontent with Ahmadinejad and Iran's hardline clerical establishment.
While Rowhani is considered a relative moderate and had the backing of Iranian reformists, the hardline supreme leader Ayatollah Ali Khamenei remains the ultimate authority on all state matters, including the nuclear program.
Israel, along with major Western countries, suspects that Iran is developing the infrastructure that would allow it to make a nuclear bomb. Although Israel believes Iran has not reached weapons capability, Netanyahu has warned that Iran is inching perilously close to the "red lines" where the nuclear program could no longer be stopped.
Israeli leaders have welcomed the sanctions, which have fueled double digit unemployment and inflation in Iran. But they say the economic pressure isn't enough, and that military action cannot be ruled out. Netanyahu has called on the international community to present a "credible" military threat to Iran, and hinted that Israel might even strike alone if it feels threatened.
Speaking to his Cabinet, Netanyahu noted that Khamenei had disqualified many more moderate candidates, and that Rowhani has made hostile comments about Israel. He also said that Khamenei still oversees nuclear policy.
"The more the pressure on Iran increases, the greater is the chance of stopping the Iranian nuclear program, which remains the greatest threat to world peace," he said. "Iran will be judged by its actions. If it continues to insist on developing its nuclear program, the answer needs to be very clear—stopping the nuclear program by any means."
Israel considers a nuclear-armed Iran to be a threat to its very existence, citing its support for militant groups on Israel's doorstep, such as Hamas and Hezbollah, its calls for the destruction of the Jewish state and its development of sophisticated missiles capable of hitting it. Tehran insists its nuclear program is for peaceful purposes only.
Israeli President Shimon Peres took a softer line than Netanyahu, saying the results amounted to a massive show of disapproval with Khamenei and Ahmadinejad.
"More than half of Iranians, in their own way, in my judgment, protested against an impossible leadership," Peres, a Nobel peace laureate, told The Associated Press in an interview. "It is clearly a voice of the people and a voice that says, 'We don't agree with this group of leaders.'"
While saying it is impossible to predict the future, he said the vote was a "new beginning" that could pave the way for a peaceful resolution to the nuclear standoff.
When Rowhani was Iran's chief nuclear negotiator a decade ago, Iran temporarily suspended all uranium enrichment-related activities to avoid possible sanctions from the U.N. Security Council. Enriched uranium is a key component in building a bomb, though it does have other purposes as well.
Israeli analysts were divided over whether having a more moderate Iranian president might actually weaken Israel's military option by making it harder to confront Iran.
Meir Litvak, head of Iranian studies at Tel Aviv University, told Israel Army Radio that Rowhani's "smiley face to the West" might make the option of military action less likely.
But Eldad Pardo, an Iran expert at Hebrew University in Jerusalem, said he didn't believe Israel would worry about public approval if it decides nuclear action is needed. More important, he said, was whether the U.S. and the U.N. nuclear agency can make progress with the new Iranian government.
"Generally speaking, I think that a different political culture in Iran is a good thing for Israel and it is good for Iran," he said.
Uzi Arad, Netanyahu's former security adviser, said that Rowhani's taking over might be good for Israel.
Arad told Israel Radio that it was a good sign that millions of Iranians voted for a candidate who "explicitly spoke about acting to ease sanctions and strive for talks with the West."