Ahmadinejad has threatened to “wipe Israel off the map” and called the Holocaust a “myth,” but Zakaim said he is not afraid.

“Why do I need to be afraid? When they speak like that, the world knows what anti-Semitism is and what a world we live in. We have been living in this world [with anti-Semitism] for 2,000 years,” said Zakaim at his shop in downtown Jerusalem.

Iran rejected on Thursday Washington’s offer to engage in talks with Tehran over its nuclear program, provided the Islamic state verifiably halts uranium enrichment.

President Bush telephoned Israeli Prime Minister Ehud Olmert on Wednesday to update him on the U.S. change in policy. According to the prime minister’s office, the two leaders agreed to stay in “close contact” over the topic.

Secretary of State Condoleezza Rice also telephoned her Israeli counterpart Foreign Minister Tzipi Livni ahead of the press conference to let her know what the U.S. was going to do.

In a statement, Livni said that Israel and the U.S. were “in agreement” regarding the Iranian nuclear threat. This was made clear during Olmert’s recent trip to Washington, she said. Israel appreciated the U.S. efforts, Livni said, and urged Iran “to make this choice for peace – to abandon its ambition for nuclear weapons.”

“The more they talk, the less they do,” said Zakaim, who sells silver Judaica items and jewelry. “It’s clear that Iran doesn’t need an atomic bomb.”

But it’s not just Israel who is concerned about it, he said, it’s the Arab countries and Europe, too. In the end, the world will not allow them to be a nuclear power. Israel or America or someone will stop them. “But they’ll wait to the last minute,” he predicted. “I’m not afraid.”

At a nearby store, brothers David and Moshe Ghatan run sell rugs, brass platters and souvenirs. They came to Israel in 1950.

Moshe didn’t want to comment on the political situation. “I’m not a politician,” he said, adding that he believed it would take force to deal with Iran.

“The Shah was very good. They overthrew him and now they are against the Jews. The Shah was like this with the Jews,” said Moshe clasping his hands together like a warm handshake. “But [this regime] is the opposite. We hope they’ll fall and go to hell.”

In the days of the Shah, said Moshe, he traveled back and forth to Iran. But he doesn’t go there anymore, he said, fearing he would be killed.

Israel and Iran had diplomatic relations until the Islamic revolution, when Tehran declared Israel and the U.S. to be its enemies.

In those days, Israel’s national air carrier El Al offered two weekly flights to Tehran, where Israel had an embassy. The only stipulation was that Israel could not fly its flag. Israeli experts were employed in Iran to construct roads and buildings and to aid in agriculture and irrigation.

Zakaim said Israel is his home and nothing can move him out of here but he hopes one day the situation will be different and he can return to Iran for a visit.

“I escaped from Persia [Iran]. Can I escape from here back to Iran? This is the [place] of the Jewish people,” said Zakaim. “I know this is my country and I live here and I’m not moving. No Palestinians, no Iranians, not anyone, not the French with all their anti-Semitism against us [can move us out].”

Still, he said, he hopes he can one day return and see the place where was born and worked.

“I have a house there, a store there, property. I bought land there for my son in his name 30 years ago. One day we’ll return. My son will return. It won’t stay like this,” he said.

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