By David Alexander TEL AVIV (Reuters) - U.S. Defence Secretary Chuck Hagel said on Sunday a $10 billion arms deal planned with Arab and Israeli allies sent a "very clear signal" to Iran that military options remain on the table over its nuclear programme. "The bottom line is that Iran is a threat, a real threat," Hagel, who arrived in Israel on Sunday on his first visit there as Defence secretary, told reporters on his plane.

Former US officials called on the White House Wednesday to initiate direct talks with Iran over its nuclear program instead of relying solely on sanctions to persuade Tehran to change course. The 35 prominent ex-diplomats, military officers and other officials from both political parties issued a report urging President Barack Obama to renew diplomatic efforts to defuse the crisis and take advantage of economic sanctions that have hit Iran hard.

Israeli Prime Minister Benjamin Netanyahu on Tuesday warned that the "tough sanctions" currently imposed on Iran might not be enough to prevent Tehran from obtaining a military nuclear capability. "We need to stop Iran from acquiring nuclear weapons," he told foreign diplomats attending a reception at the presidential residence in Jerusalem, marking the 65th anniversary of the Jewish state's foundation. "We've seen the consequences of a rogue regime having atomic weapons," he said in reference to North Korea. "Tough sanctions and talk don't always do the job."

The United States on Thursday slapped financial penalties on an Iranian businessman, a Malaysian bank and a network of companies it accused of attempting to evade international sanctions on Iran's nuclear program through money laundering. The Treasury Department blacklisted Babak Zanjani and First Islamic Investment Bank for providing financial and other support to the National Iranian Oil Company. It said Zanjani and a network of companies had moved billions of dollars on behalf of the Iranian government, including tens of millions of dollars to an engineering unit of the Isla