The question is: why is Bush, who is confronted with failure in Iraq, willing to compound his problems by attacking a more powerful Muslim state that the US has no prospect of being able to occupy?

A former member of the National Security Council gave me a possible answer.  Bush can bury his defeat in Iraq with a "victory" in Iran.

Here is the victory scenario: Bush and Cheney will claim that their air attack on Iran succeeded in destroying Iran's (non-existent) nuclear weapons program. The victory claimed by the Bush Regime and the propagandistic US media will "make America safe from nuclear attack." This will restore Bush's popularity and move the US back to a 50-50 political split in time for Karl Rove to steal the 2008 election with the fraudulent electronic voting machines built and programmed by Republican operatives.

The former national security official believes that Bush will be able to claim victory over Iran, because Iran will avoid responding militarily. Iran will not use its Russian missiles to sink our aircraft carriers, to shut down oil facilities throughout the Middle East, or to destroy US headquarters in the "green zone" in Baghdad.  Instead, Iran will adopt the posture of another Muslim victim of US/Israeli aggression and let the anger seep throughout the Muslim world until no pro-US government is safe in the Middle East.

Bush needs a short-run victory, and Iran will let him have it in order to gain the long-run victory.

The consequences for the US, Israel, and the US puppet regimes in the Middle East will be catastrophic, but they will not occur in the short-run.

This explanation solves the dilemma of why Bush would get deeper into the quagmire for the sake of the Israel Lobby.  A US attack on Iran allows Bush both to satisfy the powerful Israel Lobby and to claim to have destroyed Iran's (non-existent) weapons of mass destruction.