Israel's new $1.6 billion arms deal with Azerbaijan will transfer sophisticated military technology up to Iran's uneasy northern border and is likely to intensify Tehran's concerns about threatened attacks by the West amid rising tension in the Persian Gulf.

Israel's relations, particularly in the intelligence and military fields, with the Muslim-majority Caspian state have been growing for several years.

The Tehran regime increasingly views Azerbaijan, with which it has been at odds for years, as a potential launch pad for an Israeli attack on Iran.

Oil-rich Azerbaijan, a major energy supplier to Israel, has become a front line in the covert intelligence war between the Jewish state's foreign intelligence service, the Mossad, and Iran.

Authorities in Baku, Azerbaijan's capital, said this month they had foiled Tehran-inspired attacks by Iranian agents and their allies from Lebanon's Hezbollah against Jewish targets in and around the capital.

These included an alleged plot to assassinate the Israeli ambassador. A conspiracy to blow up the Israeli embassy in Baku, also allegedly involving Iranian and Hezbollah agents, was foiled in 2008.

The Times in London reported this month that Israel uses Azerbaijan as a base for covert operation against Iran. Tehran says this includes assassinating its nuclear scientists.

The smoldering confrontation between Iran and the West over Tehran's nuclear program, with both sides flexing military muscle in the strategic region that supplies much of the world's oil, has sharply heightened Tehran's concerns over Azerbaijan.

The disclosure in Israel of the $1.6 billion weapons deal with Baku, the Jewish state's biggest weapons sale to Azerbaijan, can only magnify Tehran's alarm.

Israel Aerospace Industries announced in early January it had secured a big arms deal but didn't identify the government involved because of military censorship. On Sunday, military sources in Tel Aviv confirmed that the recipient is Azerbaijan and that state-owned IAI will provide its military with unmanned aerial vehicles and missile defense systems.

Israel has provided Azerbaijan with UAVs since 2008 and on Sept. 12, 2011, one of the surveillance drones was reportedly shot down over the disputed Armenian-held enclave of Nagorno-Karabakh.

Christian Armenians, supported by Iran, seized the territory in a war with Azerbaijan in the 1990s following the collapse of the Soviet Union.

Israel sought to build military, economic and political links with pro-Western Azerbaijan soon after the Soviet collapse, a process accelerated after the 2010 rupture of the Jewish state's key alliance with Turkey, lynchpin of Israel's strategic policy in the region.

Israel recently concluded a military pact with Baku, and says the Intelligence Online Web site, "in exchange for arms and investment, Baku has become the beachhead of Israel's operations against Iran."

It reports that "many Israeli advisers, trainers and technicians" will go to Azerbaijan with the defense systems IAI is providing.

"This increased Israeli presence in a country that has a long border with Iran could facilitate the Israeli intelligence services' clandestine operations in the country."

Intelligence Online added: "For many years, the Mossad recruited and infiltrated agents into Iran from southern Turkey and Iraqi Kurdistan but these operations halted following the break in relations with Ankara.

"The new pact sealed with Azerbaijan will allow the Mossad to regain lost ground in Iran at a time when the Israeli authorities are stepping up their covert activities against Iran."

Tehran hasn't been slow to voice its anger at Israel's incursion into the region.

On Feb. 12, Iran's official news agency reported that the Foreign Ministry had summoned the Azeri ambassador and demanded Baku "stop the activities of the Mossad intelligence service in that country against Iran."

U.S. analyst and Iran specialist Kaveh L. Afrasiabi observed in a Feb. 15 analysis that "it is fair to say that we are witnessing an extension of the Iran-Israel conflict into the Caspian-South Caucasus …

"In mortgaging its national security to the United States and Israel, two out-of-area powers that have no intrinsic commitments to Azerbaijan's well-being … Azerbaijan has entered into a Faustian bargain that may well backfire."

An Iranian assault on Azerbaijan could have grave strategic consequences for Europe's energy security by cutting off oil and gas pipelines to the West, on top of a possible Iranian closure of the Strait of Hormuz, a vital oil artery.