Mystery surrounded the whereabouts and health of the Islamic Revolutionary Guards Corps (IRGC) commander Esmail Ghaani, amid reports that he was being investigated over how Israel managed to penetrate and crush the command structure of Hezbollah, the Lebanese militia at the heart of the Iranian “axis of resistance”.

It is known that Ghaani, who leads the IRGC’s al-Quds force, was in Beirut at the time of the killing of Hezbollah’s leader, Hassan Nasrallah, but Iranian authorities have insisted he is alive, and even in line for an award for valour.

The Qatari-backed outlet Middle East Eye claimed Ghaani had been put under house arrest and was being investigated over the failures that allowed Israel to penetrate the Hezbollah network so effectively.

Over the past two months, Israel has killed several Hezbollah leaders and appears to have made a leap forward in the quality of its intelligence.

Another Arabic outlet claimed Ghaani had suffered a heart attack during questioning.

Israeli sources said the reports, regardless of their veracity, showed the degree of stress inside the IRGC over the destruction of the Hezbollah leadership in Lebanon.

One source said: “This has been a mind-blowing success as a result of a decade of intelligence gathering. An operational shock has been delivered that has eliminated its capability to nominate successors and to conduct a coherent response to Israel.”

The source doubted Ghaani was under suspicion, describing him as “a hard-working nerd totally loyal and totally committed to the cause”. On Tuesday, Iraj Masjedi, the deputy commander of al-Quds and a former Iranian ambassador to Baghdad, told reporters that Ghaani was “in good health and is carrying out his daily duties”.

Western diplomats said it was possible that Israel was considering a campaign of assassinations of the Iranian leadership as the most escalatory end of the range of options to be used in its imminent response to Tehran’s attack last week.

The diplomats believe Joe Biden came away from a conversation on Wednesday with the Israeli prime minister, Benjamin Netanyahu, still unclear how and when Israel would respond. “He has the whiff of cordite in his nostrils” said one source, of Netanyahu, adding that there was little obvious leverage to restrain him.

Related: UN peacekeepers in Lebanon say Israel has fired on their bases deliberately

The three other options are a strike on Iranian military targets of an order similar to the Israeli strike in April; an attack on economic infrastructure, including oil facilities; or an attack on Iran’s nuclear sites.

The US has strongly advised Israel not to strike Iran’s nuclear facilities, and it has been made clear that neither the US or the UK would provide the practical help probably needed to undertake such an attack. Israeli officials have also been advised that it would be unwise to start its response at the top end of the escalatory scale.

Western diplomats believe the Israeli strikes could start as early as next week, but others calculate that the more Netanyahu delays until closer to the US presidential election on 5 November, the more leverage Netanyahu will have over the Democrats to support any decision he takes. Donald Trump, the Republican nominee, has been urging Israel to hit Iranian nuclear sites.

Gulf states are lobbying Washington to stop Israel from attacking Iran’s oil sites because they are concerned their own oil facilities could come under fire from Tehran’s proxies if the conflict escalates. Senior former Israeli intelligence officials argue that an attack on Iranian oil infrastructure would work, and not lead to a big escalation in oil prices. They doubt claims that Iran or its proxies would then attack Gulf state oil facilities, as that would undermine Tehran’s efforts to deepen diplomatic relations in the region.

The Iranian foreign minister, Sayeed Abbas Araghchi, in a diplomatic tour of the Gulf states including Saudi Arabia and Qatar, has won commitments that they will not allow Israel to fly through their airspace for any attack on Iran and have conveyed this to Washington. He said diplomatic channels with the US through other countries were open indirectly.

“Israel is looking for a large-scale war and pushing some countries into this war,” Araghchi said. “Iran is not the only one that does not want a large-scale war, but everyone knows how disastrous this war is.”

Ali Shihabi, a Saudi analyst close to the royal court in Riyadh, said: “The Iranians have stated: ‘If the Gulf states open up their airspace to Israel, that would be an act of war.’”

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