The United States will continue taking part in negotiations with Iran over the Iranian nuclear program, despite a recent Israeli seizure of an Iranian ship carrying weapons to Gaza.

White House Spokesman Jay Carney acknowledged Wednesday that Iran’s state sponsorship of terror has continued during the talks. He also said that the U.S. “will continue to stand up to Iran’s support for destabilizing activities in the region, in coordination with our partners and allies, and [make] clear that these illicit actions are unacceptable to the international community and in gross violation of Iran’s [United Nations] Security Council obligations,” according to the Times of Israel.

But Carney said that despite Iran’s terror sponsorship, “it’s entirely appropriate to continue to pursue the possibility of reaching a resolution on the nuclear program,” in negotiations between Iran and Western powers.

On Wednesday, the Israel Defense Forces intercepted an Iranian ship laden with weaponry and bound for terrorist organizations in Gaza. Carney confirmed that U.S. intelligence had cooperated with the IDF on the operation.

Prime Minister Benjamin Netanyahu pledged to work for a “durable peace” with the Palestinians in the coming weeks and reiterated his refusal to accept a deal with Iran that included any uranium enrichment capacity.

Netanyahu, in his speech Tuesday morning to the American Israel Public Affairs Committee’s annual conference, embraced an optimistic vision of peace with the Palestinians as the key to broader regional stability.

“I’m prepared to make a historic peace with our Palestinian neighbors,” Netanyahu said.

“Peace would be good for us, peace would be good for the Palestinians, but peace would open up the possibility of establishing formal ties between Israel and leading countries in the Arab world,” he said. “Peace with the Palestinians would turn our relations with them and with many Arab countries into open and thriving relationships.”

Netanyahu repeated a number of his demands of a peace agreement, including Palestinian recognition of Israel as a Jewish state and a long-term Israeli military presence on the Jordan-Judea and Samaria border, but he suggested that a deal could come soon.

“As we work in the coming days, in the coming weeks, to forge a durable peace, I hope that the Palestinian leadership will stand with Israel and the United States on the right side of the moral divide, the side of peace, reconciliation and hope,” he said.

He paused, waiting for the AIPAC supporters to applaud this vision, and when they did not, he explicitly solicited their applause.

“You can clap — you want to encourage them to do that!” he said.

Netanyahu’s message came a day after meetings he held with President Obama, Vice President Joe Biden and Secretary of State John Kerry.

Obama, before meeting Netanyahu, had told Bloomberg News that he would impress upon him the need to embrace the framework agreement Kerry hopes to unveil soon, and in Netanyahu’s AIPAC speech, he appeared to do so.

The two leaders also discussed the nuclear talks between Iran and the major powers, and in this area, Netanyahu did not appear to budge from his insistence than any deal include a total dismantling of Iran’s nuclear capability, including an end to enrichment.

“The leading powers of the world are talking about leaving Iran with the capability to enrich uranium,” he said. “That would be a grave error.”

Obama and officials in his administration have indicated that leaving Iran with a limited enrichment capability is the likeliest outcome of the talks.

Netanyahu said that Israel could not accept such a status.

“We will never be brought to the brink of extinction again,” he said. ”As prime minister of Israel, I will do whatever I must do to defend the Jewish state of Israel.”

Netanyahu also repeated his call for enhanced sanctions on Iran, something that Obama has rejected, saying they could scuttle the talks.

“You know how you get that agreement with Iran?” Netanyahu said. “Not by relieving pressure, but by adding pressure!”

A focus of Netanyahu’s speech was the boycott, divestment and sanctions movement targeting Israel, which he described as anti-Semitic.

“Those who wear the BDS label should be treated as we treat any anti-Semite and bigot — they should be exposed and condemned,” he said. “The boycotters should be boycotted!”

A March 2nd Guardian report by Harriet Sherwood and Dan Roberts (Binyamin Netanyahu visit will test strains in US-Israel relationship) included the following claim regarding efforts in the US Senate to pass a new Iran sanctions bill:

…the failure of an Aipac-supported effort to pass legislation blocking Obama’s nuclear deal with Iran has led to a reassessment of the fabled ability of its lobbyists to wield a veto over US policy when it comes to matters of Israeli security.

This is a complete mischaracterization of a bill (S.1881 – Nuclear Weapon Free Iran Act of 2013) which, by all accounts, is designed to put more pressure on Iran so that they’ll comply with any nuclear agreement that is reached with the six world powers.

The bill (sponsored by Senator Robert Menendez, along with 58 co-sponsors) has been accurately described by multiple media sources:

Washington Post

The measure introduced Thursday, if approved, would impose harsh new sanctions on Iran’s petroleum industry while also threatening U.S. allies and partners with financial restrictions unless they sharply curtail trade with Iran. The sanctions would go into effect if Iran violated the terms of the temporary accord reached last month or if it failed to reach a permanent agreement with world powers in a timely manner.

New York Times

A bipartisan group of senators, defying the White House, introduced a bill on Thursday to impose new sanctions on Iran if it failed to conclude a nuclear agreement, or stick to the terms of its interim deal, with the United States and other major powers.

The bill would seek to drive Iran’s oil exports down to zero and penalize its engineering, mining and construction industries. But the sanctions would not take effect before the six-month term of the interim deal expires, and they could be deferred for up to another six months, at Mr. Obama’s request, if the talks looked promising.

ABC News:

A bipartisan group of 26 senators introduced new legislation today proposing potential sanctions against Iran if the country fails to uphold the P5+1 agreement made last month or if it fails to reach a final agreement to terminate its nuclear weapons program.

The Nuclear Weapon Free Iran Act, co-sponsored by Sens. Bob Menendez, D-N.J., and Mark Kirk, R-Ill., which calls for additional reductions in purchases of Iranian petroleum and creates more penalties for parts of the Iranian economy, including engineering, mining and construction.

The bill also provides the administration with up to one year from implementation of the agreement to try to reach a diplomatic solution that would completely end Iran’s nuclear weapons program.

Business Insider

The legislation proposes sanctions in the event that Iran breaches the terms of the interim agreement reached last month in Geneva — or if world powers fail to come to a comprehensive agreement regarding Iran’s nuclear energy program.

Politico:

The sanctions legislation would impose conditional economic penalties on Iran if the country fails to follow through on an interim deal or pulls out of ongoing global negotiations to permanently curtail its nuclear ambitions in return for some sanctions relief.

CNN

Bipartisan legislation was introduced in the U.S. Senate on Thursday that would authorize new economic sanctions on Iran if it breaches an interim agreement to limit its nuclear program or fails to strike a final accord terminating those ambitions.

Clearly, the bill would increase sanctions against Iran only in the event negotiations with the six world powers (P5+1) fail to produce an agreement, or if Iran fails to abide by an agreement.  So, the claim made by Sherwood and Roberts that the bill would “block Obama’s nuclear deal with Iran” is untrue.

U.S. Secretary of State John Kerry told AIPAC’s annual policy conference that he would always oppose boycotts targeting Israel.

“I will continue to staunchly, loudly and unapologetically oppose boycotts of Israel,” Kerry said Monday evening at the American Israel Public Affairs Committee’s conference, drawing a standing ovation. “That will never change.”

Last month, Israeli leaders had complained about Kerry’s remark at an international conference in Munich that Israel faced increasing isolation and boycott calls in the absence of peace. He later explained that he was not advocating boycotts but warning of the likelihood of their increased popularity.

In his AIPAC address, Kerry — who is set soon to unveil a peace agreement framework for Israelis and Palestinians — pushed back against arguments that Israel ceding territory to the Palestinians as part of a peace agreement would lead to violence.

“There is a distinction between a unilateral withdrawal from Lebanon or Gaza where nothing is resolved and a phased withdrawal which is negotiated,” he said.

He described security mechanisms proposed by U.S. Gen. John Allen along the West Bank and Jordan border that would be part of any agreement.

“We will never let the West Bank turn into another Gaza,” he said to applause.

Kerry also pledged that the United States would not make a deal with Iran that allows it to develop nuclear weapons.

“No deal is better than a bad deal,” Kerry said

He defended nuclear talks now underway between Iran and the major powers. Kerry said that President Obama was committed to diplomacy because a military option presented so many dangers.

“Those who say strike and hit need to check what might happen after we do that,” he said. “Only strong diplomacy can guarantee that a nuclear weapons program goes away for good instead of going underground and becoming more dangerous.”

Prime Minister Benjamin Netanyahu told President Obama that Israel cannot let Iran get a nuclear bomb and said an end to uranium enrichment is an Israeli demand of any agreement with Iran.

“If Iran is prevented from enriching uranium and dismantles fully its military nuclear capability,” Israel would accept the deal, the Israeli prime minister told Obama on Monday when they met at the White House in the Oval Office.

Obama and U.S. officials have said that Iran is likely to be left with a limited enrichment capability as part of any deal.

“Israel cannot permit such a state to have the ability to make a bomb,” Netanyahu said. “We just cannot be brought back to the brink of destruction. I as the prime minister of Israel will do whatever I must to defend the Jewish state.”

Netanyahu also appeared to push back against warnings from Obama in an interview published Sunday by Bloomberg View that Israeli settlement expansion and a failure to achieve a peace agreement with the Palestinians would lead to Israel’s international isolation.

“Israel has been doing its part, and I regret to say the Palestinians haven’t,” Netanyahu said, saying he expected an end to Palestinian incitement and recognition of Israel as a Jewish state.

“That’s what the people of Israel expect me to do, to stand strong against criticism, against pressure.” he said.

Obama refrained from pushing back in the Oval Office appearance, confining his remarks to pledging to keep Iran from obtaining a nuclear weapon and commending Netanyahu for his commitment to the peace process.

U.S. Secretary of the Treasury Jack Lew on Sunday at the American Israel Public Affairs Committee conference reiterated the Obama administration’s opposition to new Iran sanctions during the interim nuclear deal, and said the temporary relief that the six-month interim agreement gives Iran has not undone the impact of existing sanctions.

New sanctions could derail the nuclear talks between Iran and world powers and “splinter” the international effort that has made the current sanctions effective, according to Lew. “No amount of U.S. sanctions would have the same crippling power” without international backing, he said.

Additionally, “If the moment comes that we have to use force [against Iran], the world has to understand that we did everything possible to achieve change through diplomacy,” Lew said.

The treasury secretary said that the “vast majority of our sanctions remain firmly in place” and that those sanctions provide a “powerful incentive for Iran to negotiate.” He stressed that the oil and financial sanctions on Iran—what he called the “core architecture” of the sanctions— remain fully in effect.

Economic sanctions “have crippled Iran’s economy on many fronts,” including the fact that Iran’s rial currently has lost 60 percent of its value against the dollar, said Lew. He noted that when the interim deal expires, “so does the relief” on Iran, and that the current $7 billion in financial relief would only continue to flow to Iran if the country demonstrates week-by-week compliance with the interim deal.

“This is not a case of trust and verify,” Lew said. “This is a case of verify everything.”

Yet Lew acknowledged that America is “under no illusions of who we’re dealing with,” citing Iran’s support for terror groups such as Hezbollah and its failure to live up to past promises.

The American Israel Public Affairs Committee urged Congress to outline terms for a final nuclear accord with Iran that would include dismantling its nuclear program.

“We urge Congress to outline for Iran the acceptable terms of a final accord,” said an Op-Ed in the New York Times on Saturday signed by AIPAC President Michael Kassen and Lee Rosenberg, the chairman of its board.

“This must include, at a minimum, the dismantling of its nuclear program, so that Iran has neither a uranium nor a plutonium pathway to a nuclear weapon,” it said.

This was part of the message, the writers said, that thousands of AIPAC activists would take to Capitol Hill next week during the annual AIPAC policy conference.

Obama administration officials have said that a total dismantling of Iran’s nuclear program is an unrealistic expectation of the talks now underway between Iran and the major powers aimed at finding a formula to keep Iran from obtaining a nuclear weapon.

In Jerusalem to brief Israeli leaders after the latest round of Iran talks, Undersecretary of State Wendy Sherman said she would not count out an Iranian enrichment capacity as an end result.

“The objective here is to ensure that Iran cannot obtain a nuclear weapon and that its program is exclusively peaceful,” she told Israeli reporters on Saturday.

“Whether, in fact, Iran will have a domestic enrichment program is part of the negotiations,” Sherman said. “In the Joint Plan of Action, it was envisioned that it was possible, that Iran might have a small, discreet enrichment program.”

The Joint Plan of Action is the interim sanctions-for-nuclear rollback deal that allowed the current talks to take place. The talks, launched last month, are for six months, but may be renewed for another six months.

The AIPAC Op-Ed notably did not embrace any specific legislation and noted that while the lobby still backed new sanctions that had been proposed in the Senate, it also backed delaying a vote for now.

President Obama had threatened to veto new sanctions legislation, saying it could scuttle the talks.

The Op-Ed urged Congress to assert its foreign policy prerogative, even over the opposition of the president, and press the case for a tougher line with Iran during the talks, including enhanced sanctions.

“Historically, presidents have resisted congressional involvement that would affect or constrain their diplomatic efforts,” the Op-Ed said. “At this moment, we must not allow Iran to dictate the appropriate role of Congress.”

Part of the message activists will deliver to Congress would be that lawmakers should assert a more robust oversight of the Iran-major powers talks, it said.

The military censor has released for publication that two Israel’s are being interrogated on suspicion of trying to ship spare parts to Iran for its fighter jets and anti-aircraft missiles.

Both suspects, brothers-in-law Avichai Weinstein and Eli Cohen, have been interrogated in the past in several countries, but they always managed to escape indictments. Cohen has been investigated six times in the past 12 years and previously has been slapped with fines of hundreds of thousands of dollars by the United States.

A Greek newspaper reported earlier this week that two Israelis had been arrested on suspicion of trying to smuggle arms to Iran, but their identities were not released for publication until Thursday.

Cohen previously has tried to smuggle arms via the United States, Germany, Thailand and Portugal, sending spare parts for the Iranian Air Force and the Iranian Revolutionary Guards.

Israel has questioned Cohen in the past but never has been able to prove he intended to trade with Iran, an enemy country and embargoed by the United States. After every investigation, Israeli authorities released him and gave him back his license as a trader.

This time around, he was caught in Greece when officials inspected two containers of parts for Phantom F-4 jets and missiles last April and in December 2012.

Greek officials said the containers arrived from Binyamina-Givat Ada, southeast of Haifa, and were destined for a straw company named Tassos Karras, listed as having offices in Athens.

A contact number was listed for a British citizen living in Sicily, but police have not been yet found him.

The current investigation began in 2012, and a Greek court stopped the shipments, ordering them to turn over to American authorities on suspicion of violations of American sanctions against Iran.

Cohen also has probed in 2000 for smuggling parts for armored tanks. In a separate case, Weinstein was the key suspect when Germany discovered that one of his shipments contained Israeli equipment destined for Iran via Hamburg. He denied all allegations.