A senior official at the ministry in Jerusalem sought advice from Australian leaders this week about whether they thought the career diplomat should be returned to Canberra with a caution, or ousted from the post.
The AJN understands a memo has been sent by senior officials in the Foreign Ministry to director-general Aharon Abramovitch and Foreign Minister Tzipi Livni, strongly advising against returning Tamir to Australia.
But others inside the ministry have also suggested Tamir would keep his job, although perhaps for a shorter tenure.
The spat was sparked by Tamir's comments quoted in Ha'aretz last Friday, in which he was reported to have said that Asia is "the yellow race" and Asians have "yellow skin and slanted eyes".
But the embattled envoy blamed the controversy on a misunderstanding and vowed to clear his name and return to work.
At least five senior Jewish Australian leaders departed for Israel this week for the Jewish Agency's board of governors meeting, which begins on Sunday, fuelling speculation that they may be consulted by officials in Jerusalem over the diplomat's future.
Mark Leibler, chair of the world board of governors of Keren Hayesod-United Israel Appeal Dr Ron Weiser, immediate past president of the Zionist Federation of Australia Dr Danny Lamm, president of the State Zionist Council of Victoria (SZCV) Jack Smorgon, chair of the United Israel Appeal (Victoria) and Ron Finkel, vice-president of the (SZCV) are among the most senior Zionist leaders in Australia.
'Hard to imagine him being sent back'
Most Australian Jewish community officials were reluctant to condemn Tamir before the outcome of the ministry's inquiry.
But one senior Jewish leader, who spoke to the AJN on condition of anonymity, said it was unlikely Tamir would be sent back to Canberra.
"It's hard to imagine him being sent back. If it was proven correct that these were his comments, it's hard to imagine him being able to operate properly. I don't think he could return quickly."
He added that the comments of Shadow Foreign Affairs spokesman Kevin Rudd who described Tamir's remarks as "completely unacceptable" made it "very difficult" for the diplomat to return to Australia.
Neither Prime Minister John Howard nor Foreign Minister Alexander Downer have commented on the scandal.
Tamir was called back to Jerusalem on Sunday from China, where he was en route to Australia, to explain his comments reported in Ha'aretz's English edition last Friday.
He told the AJN this week from Tel Aviv: "The recent comments attributed to me were a result of a misunderstanding and were put out of context. These comments do not in any way represent my views."
Tamir said that he expects to be back in Canberra in "a few days" and to "resume his duties" as ambassador to Australia.
He was originally scheduled to explain his comments on Wednesday to the director-general of the Foreign Ministry, but the meeting was postponed until Thursday.
With Tamir's comments sparking a storm of protest last Friday, the Foreign Ministry immediately issued an immediate statement saying that the remarks, if true, were "unacceptable" and it could not return to "business as usual".
'A decent man'
A Foreign Ministry spokesman, Australian-born Mark Regev, told the AJN this week that the inquiry was still underway. When asked whether Tamir will return to his post, he said it is "all a function of the findings of the inquiry", and that, if indeed it is proven that Tamir was quoted accurately, there will be no return to "business as usual".
A source told the AJN it was "very likely" Tamir would be ordered to stay in Israel until the dust settles before being returned to Australia and eventually being replaced before his term ends.
Isi Leibler, a former president of the Executive Council of Australian Jewry, said: "Naftali Tamir is a decent man who I am sure does not have a racist bone in his body. If he was quoted correctly his language was disastrous and I am sure that he did not intend to convey what was said if it was said."
Senior Jewish leaders were awaiting the outcome of the ministry's investigation and were reluctant to condemn Tamir.
Zionist Federation of Australia president Philip Chester said the comments - if true - were more likely to be a result of poor expression than racist sentiment.
"From my extensive dealings with the ambassador, I find these alleged comments to be out of character and inconsistent with his constructive advocacy on behalf of the State of Israel," Chester said.
"It is important that we all reserve judgement until the facts are clarified."
But Finkel, who is president of Ameinu (formerly Labour Zionists), said the comments would be inexcusable if found to be accurate.
"It is with enormous regret that I have read the remarks attributed to him, which, if true, would certainly mean the effective end of his tenure as ambassador," he said.
"To suggest that engagement with Asia could in any way be based on race is grossly offensive."
Executive Council of Australian Jewry president Grahame Leonard praised Tamir's performance in the post and warned against rushing to condemn the diplomat.
"It should be said that he is entitled to the presumption of innocence," Leonard said. "He is a very popular and well-regarded ambassador, and he performed outstandingly well during the Lebanon war."
Mark Leibler said Tamir had been a strong advocate for Israel and was a respected diplomat. "Everyone would agree those remarks are highly inappropriate, but at the moment they're under investigation by the Foreign Ministry, and I think we have to wait for that to run its course."
Dr Weiser said the remarks were out of character for Tamir, a sentiment echoed by most community leaders. "I'd be surprised if he made those comments. It's hard to reconcile those remarks with the Nati we know.
"At the end of the day, we have to give him the benefit of the doubt it will depend on exactly what he said, and the context in which he said it."
Tamir, who began his tenure in Australia in February 2005, replaced Gabby Levy, although deputy chief of mission Orna Sagiv filled in as acting ambassador in 2004, and had to fend off a major diplomatic meltdown with New Zealand Prime Minister Helen Clark over the "passport affair".
Tamir oversaw the rapprochement between Wellington and Jerusalem and has since been accredited as non-resident ambassador to New Zealand.
Tamir, who has previously been Israel's envoy to Finland, is also non-resident ambassador to Fiji and Papua New Guinea.
Just prior to his arrival the Department of Foreign Affairs and Trade sent home Amir Laty, a junior Israeli diplomat, without explanation, sparking a media frenzy over the reason an ally of Israel would oust a diplomat.
It is understood no Israeli envoy to Australia has ever been recalled.
Reprinted with permission of Australian Jewish News