As profound as the disagreement is between Israel and the U.S. over the substance of the nuclear deal being negotiated with Iran, the two countries disagree just as fundamentally over the consequences of failing to complete such a deal.

In fact, this disagreement is central to the wildly divergent calculations being made by President Barack Obama and Israeli Prime Minister Benjamin Netanyahu. The heart of the dispute is simply this: If the talks fail to produce an agreement now, Israel believes the continued pressure of economic sanctions can compel Iran to agree to a much better deal later on. The Obama administration’s fear is that if the U.S. simply walks away from the talks, that could cause the collapse of the sanctions regime—and the end of any real pressure on the Iranians.

This dispute is crucial as negotiations reach their climax this week. After months of diplomatic feints and jabs, the self-imposed deadline for reaching the outlines of a deal arrives Tuesday. And while talks may slip past that point, diplomacy has reached its critical juncture.

As this climactic moment arrives, the Obama administration’s eagerness for a deal is becoming clear. The president and his aides appear to believe a deal can not only curb Iran’s nuclear program short of the ability to produce a weapon, but can open the door to a more productive relationship that reduces broader Iranian misbehavior over time. Israel deeply disagrees on both points, arguing that a deal will only enshrine Iran’s nuclear program and that the desire to preserve such a hard-won agreement will give the U.S. a powerful incentive to look the other way when Iran misbehaves.

All sides agree that the main reason Iran is at the negotiating table in the first place is its desire to win relief from oppressive international economic sanctions in any deal. The dispute between the U.S. and Israel, then, is over whether those sanctions are a perishable commodity.

The administration’s view is that the rest of the world bought into sanctions against Iran in service of diplomacy, not in lieu of it. In other words, the international partners—particularly the more balky ones such as Russia, China and India—agreed to put the heat on Iran precisely to drive forward the negotiations that are under way now, not as some kind of permanent situation.

Indeed, there were great fears, notably in Israel, that an interim nuclear agreement struck with in late 2013—which has frozen some elements of Iran’s nuclear program in place in return for limited sanctions relief while talks continue—would imperil the sanctions regime by opening a crack in it that some nations would then rush through. That hasn’t happened, but U.S. officials doubt that the pressure to stick with sanctions can be sustained forever.

In this view, withdrawing from talks without a deal would give Russia, China India and some European nations a perfect reason to walk away from sanctions, leaving the U.S. and Israel with the worst of all worlds: no negotiated limits on Iran’s nuclear program and no remaining pressure to win them later.

Mr. Netanyahu’s view was encapsulated in his controversial address to a joint meeting of Congress three weeks ago. “Iran’s nuclear program can be rolled back well beyond the current proposal by insisting on a better deal and keeping up the pressure on a very vulnerable regime, especially given the recent collapse in the price of oil,” he said.

In the Israeli view, the glue that could keep economic sanctions in place even if talks collapse is a credible military threat against Iran. Other nations so fear the consequences of an American or Israeli attack on Iran’s nuclear facilities if sanctions collapse that they would stick with the sanctions just to forestall the possibility.

Moreover, Israel believes, the most important and effective economic sanction is the one blocking Iran’s access to the international banking system. That is one the U.S., as the center of the international financial system, has the power to keep in place all by itself, regardless of whether allies agree or not.

And at a time when oil prices are so low, the argument continues, it doesn’t take as much pressure to produce economic pain.

Karim Sadjadpour, an Iran analyst at the Carnegie Endowment, thinks that, in the end, neither side may be entirely right—or entirely wrong. Allies are more eager to retain good economic ties with the U.S. than with Iran, which means they may hang in with Washington on sanctions, he says. On the other hand, he adds, Iran senses its international isolation slowly easing, so it won’t feel the need to “capitulate” to continued sanctions to avoid a collapse of its regime.

What is clear is that this disagreement lies at the heart of the U.S.-Israeli split as talks reach the finish line.