"Iranian efforts to master the entire fuel cycle are extremely disquieting," he told a security conference in the Israeli town of Herzliya.

"We have from the very beginning made it unmistakeably clear to the Iranian side that the West will under no circumstances tolerate such a development," a stance based partly on concern for Israel's security, he added.

Fischer was one of three EU ministers who flew to Tehran earlier this year to persuade Iran to cooperate with the International Atomic Energy Agency (IAEA).

"It would be a nightmare not just for Israel but also for the whole region and indeed Europe if the Middle East were to acquire nuclear capabilities and thus face a nuclear arms race."

The subject of Iran was brought up earlier Wednesday in Fischer's talks with Israeli Prime Minister Ariel Sharon on the final day of a short visit to the region.

Fischer warned Tehran to comply with international demands for inspections, saying "the only thing that counts for us are verifiable facts."

Iran, which insists its nuclear programme is entirely peaceful, said earlier Wednesday it would probably be signing on Thursday an additional protocol to the nuclear Non-Proliferation Treaty allowing for unscheduled inspections of suspect sites by the IAEA.

Israel is generally believed to possess nuclear weapons, the only country in the Middle East to do so.

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