The Israeli public has not yet grasped the profound significance of retired Mossad chief Meir Dagan's recent statement about Israel's security problems. It revealed a fundamental split between the upper echelons of the professional defense establishment and the more ideologically driven government politicians over both foreign policy and the assessment of real threats to Israel's very existence.

Dagan blamed the government for its failure to adopt a political initiative in light of the Palestinians' diplomatic offensive. He called on Israel to renew negotiations with the Palestinian Authority and to respond positively to the Arab League's initiative for a comprehensive peace with the Arab states. Most importantly, he warned against an attack on Iran's nuclear facilities, calling it "military adventurism" on the part of the Benjamin Netanyahu-Ehud Barak duo.

Superficially his statement seemed to be a repetition of the 1999 "democratic putsch," when retired Chief of Staff Lieutenant General Amnon Lipkin-Shahak founded a new party -- the Center Party -- which attracted votes that removed Prime Minister Netanyahu from power and indirectly helped the Labor Party return to lead the government coalition. At the time almost 100 senior officers in reserve duty, many of whom had just concluded their service, assisted the opposition parties in toppling the Likud government. Lipkin-Shahak had even stated that Netanyahu constituted a national security threat.

This time, several politicians within the corridors of power quickly attacked the former Mossad head. They claimed his motives for attacking the Prime Minister were personal. Dagan was accused of damaging state secrets and some, such as Minister Daniel Hershkowitz, advocated taking legal actions against him. However, the personal attack against Dagan, who has been a revered national hero, did not succeed in suppressing the judgment of military professionals, who are deeply troubled that the fate of the country is in the hands of policymakers who are driven by ideological convictions instead of pragmatic concerns.

Dagan is not the only figure in the defense establishment to have so sharply criticized Netanyahu. Before him, there was former head of the General Security Service Carmi Gilon, as well as Gabi Ashkenazi, who recently concluded his term as IDF Chief of Staff. When Dagan was asked by reporters why he exposed the public to information that is supposed to remain confidential -- information regarding Israel's capabilities and intentions to attack Iran -- he responded that in their positions the three of these men had the strength to stand up to the political echelons, but that those who are now in these positions will not be able to do so.

Dagan's critics are right to assert that his statements regarding Israel's inability to attack Iran's nuclear facilities weaken the country's power of deterrence. But those who know the man -- who was Ariel Sharon's student and protégé and appointed by him to head the Mossad -- know that he must have taken this into account. If he did reveal national secrets, it means he estimated that the potential harm caused by flawed decision-making by Barak and Netanyahu is much greater than the damage to Israel's capacity for deterrence. Dagan is far from being a peacenik or naïve flower child. As head of the Mossad, he increased the organization's operational capacities and was responsible for thwarting many terror attacks on Israel. Under his leadership the Mossad also has damaged Iran's nuclear system and weakened the operational capacities of Hamas, Hezbollah, and international terrorist organizations.

The suggestion to moderate Israel's policy towards the Arab world continues a traditional approach espoused by many in the Israeli defense establishment that combines military resolve and political moderation. Dozens of major-generals and security officials signed a document two month ago calling on the Netanyahu government to change its policy. They did this, first and foremost, because within the military and security systems they have been operating in for many years, they have become pragmatic, flexible, and non-ideological; this, as opposed to the hard line ruling school of thought in contemporary Israeli politics.

The Dagan ordeal also explains why the relations between former Chief of Staff Gabi Ashkenazi and Defense Minister Ehud Barak deteriorated so much last year. At the time it appeared publicly that the background to their disputes was over who should be appointed the next Chief of Staff. Barak wanted Major-General Yoav Galant, who Ashkenazi opposed. Barak called Ashkenazi's behavior a "military putsch," claiming that the political echelon is responsible for making such decisions, and not officers under his command.

Today, however, is it clear Ashkenazi was concerned Barak would appoint a Chief of Staff that would simply endorse all of his decisions, and instead of presenting the professional considerations, would go along with the "military adventurism" of the Barak-Netanyahu government.

This tumult, which just began to unfold in recent weeks, has many consequences. One of them is that Prime Minister Netanyahu returned from his last trip to Washington a national hero. His performance in Congress and contrarian positioning vis-à-vis President Obama have added to his popularity on the Israeli street, as a man who is seen not to be afraid of standing up for Israel's security interests. Now it turns out that it is in fact the upper echelons of the defense establishment in Israel -- which has an acute understanding of Israel's actual security interests -- that sees the Prime Minister in a very different light.

The Dagan Affair is not a case of one officer ridiculing politicians, as General Stanley McChrystal did a year ago and who was then fired by President Obama. It reveals deep-seated disputes regarding Israel's existence between the professional elite of the defense establishment and the politicians who manage it. We should therefore not view the conflict as circus slapstick and let ourselves be distracted by personalities. This time its outcome could determine Israel's fate.

Yoram Peri is Abraham S. and Jack Kay Chair in Israel Studies and Director of The Joseph B. and Alma Gildenhorn Institute for Israel Studies at University of Maryland, College Park, MD. Formerly a political advisor of Prime Minister Rabin, his latest book is Generals in the Cabinet Room: How the Military Shapes Israeli Policy (USIP Press 2006).