McCain said however that diplomatic options had not been exhausted and further sanctions might compel Iran to halt its nuclear drive, which Israel and the West believe is aimed at developing atomic weapons.

"I think that we Americans joining with our European allies can impose significant and very impactful sanctions on Iran which I think could modify their behavior," McCain told Israel's Channel 2 in a Washington interview.

"I would hope that we could succeed in that direction and I have some optimism we can, but I have to look you in the eye and tell you that the United States of America can never allow a second Holocaust."

Iran has always said its nuclear programme is solely aimed at producing energy for its growing population.

Israel however considers Iran its main strategic threat, both because of the nuclear programme and repeated statements from Iranian leaders predicting the demise of the Jewish state.

The interview came days before McCain's Democrat opponent Barack Obama was due to arrive in Israel on a world tour aimed at shoring up his foreign policy credentials vis-a-vis McCain, a veteran US Senator and war hero.

McCain described Obama as a "very gifted speaker" who had "inspired millions of young people" but said he and the Illinois senator "really have stark differences in our positions."

One such difference is on the question of direct negotiations with Iran. Obama has said he would meet face to face with Iranian President Mahmoud Ahmadinejad, though only after certain "preparations."

McCain said that while "it's very possible to have talks and communications at different levels" he would not meet with Ahmadinejad without preconditions.

"What I object to would be a face-to-face without preconditions meeting with Ahmadinejad, who would probably at the meeting, which would have worldwide coverage, announce his country's dedication to the extinction of the state of Israel."

Asked if he would support military action against Iran if diplomatic efforts failed, McCain said: "We have a lot of options to explore before we seriously explore the military option and I don't think we have exercised those enough."

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