Caution and optimism greeted William Hague’s announcement of re-established diplomatic ties with Iran this week – with many in the Jewish community expressing far more of former than the latter.

The Foreign Secretary announced on Tuesday that the two countries were already working towards re-opening their respective embassies with muted concern.

Echoing Winston Churchill’s famous lament, Lord Palmer of Childs Hill agreed that it was “better to jaw-jaw than to war war,” but echoed the community’s concerns, asking: “How realistic is the dream of peace with Iran?”

“I personally have very strong doubts about Iran’s intentions,” he said. “While I understand Hague’s desire for dialogue, I hope this isn’t used to give sustenance to a belligerent power.”

Hague announced the diplomatic reset on Tuesday, revealing that both countries had appointed a charge d’affaires to help increase ties “on the way towards eventual re-opening of both our embassies”.

Britain’s embassy in Iran was closed in November 2011 after it was attacked by an angry mob believed to have been encouraged by the previous president Mahmoud Ahmadinejad.

A new Iranian president was elected this summer, however, and since then there has been a significant thaw in relations between Tehran and the West.

Israeli Prime Minister Benjamin Netanyahu has consistently warned that new man Hassan Rouhani is “a wolf in sheep’s clothing”

However, President Obama and other European leaders have been keen to reach out to Rouhani, who is considered a moderate by some and who has said he wants to reach an agreement on Iran’s nuclear programme.

“There was a much better atmosphere at the United Nations last month,” said the Board of Deputies’ Alex Brummer.

“It makes absolute sense to re-establish diplomatic links, but we need to be fully aware of the doubts about the Iranian regime, and we need to maintain the sanctions. It would be a mistake to take the pressure off at this stage.”

Hague told lawmakers that Rouhani’s team had “presented themselves in a much more positive light” at the UN meet-up in New York.

But he warned that Iran was still in breach of six UN resolutions over its alleged development of nuclear weapons, adding: “We must test the Iranian government’s sincerity to the full.”

Despite the caution, analysts agreed that the apparent détente between Britain and Iran would worry Jerusalem.

Prof. Clive Jones, chairman of the European Association of Israel Studies, said: “Israeli diplomats will be asking whether this is a chink in the armour of unity. The sanctions have only been successful because [Israeli Prime Minister Benjamin] Netanyahu cajoled so many states to sign up.”

Toby Greene, a director at the Britain Israel Communications Research Centre (BICOM) said Hague was right to stress there should be no sanctions relief until Iran makes a major change in its behaviour, since it is the sanctions which have made Iran want to negotiate.

He added: “Despite Rouhani’s diplomatic offensive, Iran’s nuclear programme is currently moving full steam ahead, so time is of the essence.”

The Israeli embassy in London declined to comment.