In an interview with Der Spiegel published on Saturday, Olmert urged the international community to take "more dramatic steps" to fend off the Iranian threat.

Asked about the world's approach to Iran's hard-line president, Mahmoud Ahmadinejad, Olmert replied, "I am anything but happy about it. I expect that significantly more dramatic steps be initiated."

Olmert did not specify what steps should be taken. He said he wanted "effective measures that are accepted by the international community to stop the Iranian danger."

Pressed on whether Israel has ruled out a military strike, Olmert said, "I rule out nothing."

In the Der Spiegel interview, Olmert was asked about the possibility of the US talking with Iran. "As long as talks end with the result that Iran ends its nuclear program, I am not against them," he said.

Ahmadinejad said on Saturday that his country had expanded its uranium enrichment program at a plant in central Iran, a semi-official news agency reported.

"We have started installing 3,000 centrifuges," Ahmadinejad was quoted as saying by the Fars news agency. "This is the first step toward industrial production. We will be able to produce our nuclear fuel once we install 60,000 centrifuges." Centrifuges spin uranium gas into enriched material to produce nuclear fuel.

Olmert's spokeswoman, Miri Eisin, said German support for sanctions would make a huge difference. She said German Chancellor Angela Merkel backed sanctions but that there was a problem with the German business community.

Reiterating comments he made to German Foreign Minister Frank-Walter Steinmeier last week, in an interview with German television Olmert criticized him for traveling to Syria. Speaking to the N24 station, he said Steinmeier should have taken a tougher line during his trip to Damascus last Monday.

"I am friendly with Minister Steinmeier, but I think he made a mistake and I told him before he went to Syria that this is a mistake," Olmert said. "I think that in Germany there are voices that share my opinion about it."

Olmert cited Syria's close ties with Iran and its support for Hizbullah and Hamas. He also said Syria was supporting Iraqi insurgents who have killed American soldiers and Iraqi civilians.

"Is this a good platform for a German foreign minister to visit?" Olmert asked. "Did I hear any voices coming from Mr. Steinmeier criticizing the conduct of the Syrian government?"

In Damascus, Steinmeier urged Syria to use its influence to moderate the demands of Hizbullah, which has been calling on the US-backed Lebanese government to resign. He also asked Syria to pressure Hamas, which has its headquarters in Damascus, to facilitate peace talks between Israel and the Palestinians.

In Washington on Friday, Steinmeier defended his trip as an attempt "to at least test whether difficult partners such as Syria can be brought onto a constructive path in the Middle East peace process." With few alternatives, he added, "one must try even those routes that are controversial."

Merkel said Saturday that she would advocate a "comprehensive diplomatic initiative" on Iraq that would involve the country's neighbors and contribute to stabilizing the Middle East. She said Germany was ready to make "an active contribution" to tackling the region's problems during its presidency of the European Union, which starts on January 1, and beyond. Her comments in her weekly video podcast came ahead of meetings with the leaders of Egypt and Israel.

Merkel said a report on Iraq by a bipartisan US panel headed by former US secretary of state James A. Baker III and former congressman Lee Hamilton was "of particular significance."

"I support particularly a comprehensive diplomatic initiative in which Iraq would also include its neighboring states and through which a contribution could be made to stabilizing the Middle East as a whole," Merkel said.

She did not refer specifically to the panel's call for the US to engage adversaries Iran and Syria - a course the Bush administration has thus far rejected.

Merkel underlined her commitment to a "stable, independent Lebanon."

"All must make a contribution to that - particularly Syria, which from my point of view so far is not fulfilling sufficiently its obligations," she said.

"We naturally also need to safeguard Israel's right to exist - all must also recognize this, otherwise there will be no peace in the Middle East," Merkel added. "We also need a Palestinian state in which the Palestinians can sensibly develop economically and culturally."•