The main pro-reform candidate in next week's Iranian elections accused current president, Mahmoud Ahmadinejad, of undercutting Iran's international standing by questioning the Holocaust. In a nationally televised debate on Wednesday, Mir Hossen Mousavi said Iran has been "downgraded" in the eyes of world by Ahmadinejad's firebrand style and statements. Just hours earlier, Ahmadinejad called the Holocaust a "big deception" and claimed Israel uses it to sway international support. "Our nation's dignity has been harmed. We've been degraded. There has been increasing tension (under Ahmadinejad). ... Is it in our interests?" Mousavi said during the face-to-face debate broadcast live across Iran. Mousavi and Ahmadinejad are in an increasingly tight race heading into the June 12 election. The outcome will set the tone of Iran's policies on crucial issues ahead such as its standoff with the West over its nuclear ambitions and the possibility of groundbreaking talks with Washington after a nearly 30-year diplomatic freeze. In Paris, French President Nicolas Sarkozy told Iran's foreign minister, Manoucher Mottaki, that Iran faces greater isolation if it refuses to negotiate over its nuclear program. Sarkozy also denounced Ahmadinejad's questioning of the Holocaust as "shocking." Ahmadinejad's bid for re-election has been burdened by Iran's stumbling economy and accusations from rivals that his confrontational policies have left Iran with few friends in the world. In the debate, Ahmadinejad also appeared on the defensive. He accused two former presidents - Mohammad Khatami and Hashem Rafsanjani - of joining forces with Mousavi to wage a campaign of "lies" against him. Rafsanjani, however, is backing former parliament speaker Mahdi Karroubi in the race. The fourth candidate is hard-liner Mohsen Rezaei, a former commander of the powerful Revolutionary Guard. "I'm not fighting against one candidate," Ahmadinejad complained during the debate. "I'm standing against a combination led by Rafsanjani and with the cooperation of Mousavi and Khatami." Ahmadinejad can still count on strong backing from the ruling theocracy, which has the final say in all important policy matter and is capable of mobilizing millions of votes. But Mousavi's "green movement" - named for the color adopted as a campaign symbol - appears to be gaining serious ground among young voters as the race moves into the final week. Shortly before the debate, Ahmadinejad told a gathering of international scholars that Israel uses the "big deception of the Holocaust" to gain allies in the West. In April, at the UN's conference against racism in Geneva, the Iranian president accused the West of using the Holocaust as a "pretext" for aggression against Palestinians, provoking walkouts by delegates including every European Union country in attendance. The United States and eight other Western countries had already boycotted the event that started on the eve of Israel's Holocaust Remembrance Day, because of concerns Muslim countries would drown out all other issues with calls to denounce Israel and restrict free speech when it comes to criticizing Islam. The Iranian president repeated his previous anti-Israel comments in September, calling the Holocaust by Nazi Germany during World War II a "fake" and saying that Israel is perpetrating a holocaust on the Palestinian people. Ahmadinejad, known for virulent anti-Israeli rhetoric, said in 2005 that Israel should be "wiped off the map" and later called the Holocaust a "myth." Most recently, he described the Jewish state as a "germ of corruption." Sarkozy denounced the "profoundly shocking character" of Ahmadinejad's latest remarks, the president's office said in Paris. Sarkozy also told Mottaki that Iran's "outrageous verbal attacks against the state of Israel were not acceptable." Sarkozy said negotiations on Iran's nuclear program with the international community could "open a path of very large cooperation to Iran's benefit, including in the civilian nuclear (field)," the president's office quoted Sarkozy as saying. "A negotiated solution is possible," the French president said, noting the United States is now "fully engaged in discussions." Iran maintains its nuclear program is designed only to provide electricity. But Israel, the United States and other nations fear the effort is aimed at acquiring nuclear weapons.