Iran's hardline President Mahmoud Ahmadinejad triggered new international outcry by saying the "tumour" of the state of Israel should be relocated to Europe.

His remarks were greeted with outrage from Germany, Austria, Israel and the United States, at the forefront of an international campaign to prevent the Islamic regime from acquiring nuclear weapons.

Ahmadinejad, who in October said arch-enemy Israel must be "wiped off the map", said that if Germany and Austria believed Jews were massacred during World War II, a state of Israel should be established on their soil.

"You believe the Jews were oppressed, why should the Palestinian Muslims have to pay the price?" he asked in an interview with Iranian state television's Arabic-language satellite channel, Al-Alam.

"You oppressed them, so give a part of Europe to the Zionist regime so they can establish any government they want. We would support it," he said, according to a transcript of his original Farsi-language comments given to AFP.

"So, Germany and Austria, come and give one, two or any number of your provinces to the Zionist regime so they can create a country there... and the problem will be solved at its root," he said.

"Why do they insist on imposing themselves on other powers and creating a tumour so there is always tension and conflict?"

Ahmadinejad, a straight-talking former commando who swept to the presidency after a shock election win in June, is no stranger to controversy.

"Unfortunately this is not the first time that the Iranian leader has expressed outrageous and racist views towards Jews and Israel," said Israeli foreign ministry spokesman Mark Regev.

"I hope that these outrageous remarks will be a wake-up call to people who have any illusions about the nature of the regime in Iran."

Israel's views were echoed by the United States, its closest ally.

"It just further underscores our concerns about the regime in Iran. And it's all the more reason why it's so important that the regime not have the ability to develop nuclear weapons," said White House spokesman Scott McClellan.

German Chancellor Angela Merkel said Ahmadinejad's combative suggestion that Israel was "totally unacceptable" and Austrian Chancellor Wolfgang Schuessel, speaking after a meeting with US President George W. Bush, called the remarks "an outrageous gaffe, which I want to repudiate in the sharpest manner."

German Foreign Minister Frank-Walter Steinmeier said the EU's nuclear diplomacy is "not made easier by the fact that Mr Ahmadinejad comes up with new ideas, that the people of Israel could move to Germany and Austria, to resolve the Middle East problem".

Italian Prime Minister Silvio Berlusconi also condemned the remarks.

In Ahmadinejad's interview, he referred to the Holocaust as a matter of belief, and raised the issue of revisionist historians -- who attempt to establish that figures on the number of Jews killed by the Nazis are wildly exaggerated -- being prosecuted in Europe.

"Is it not true that European countries insist that they committed a Jewish genocide? They say that Hitler burned millions of Jews in furnaces... and exiled them," he said.

"Then because the Jews have been oppressed during the Second World War, therefore they (the Europeans) have to support the occupying regime of Qods (Jerusalem). We do not accept this."

The Holocaust was Nazi Germany's systematic slaughter of an estimated six million Jews between 1933 and 1945.

Official Iranian media frequently carry sympathetic interviews with Holocaust revisionists, and the regime itself also refuses to recognise Israel.

Ahmadinejad also proposed "a referendum in Palestine for all the original Palestinians" to decide on the future of what is now Israel, the Gaza Strip and West Bank.

But he said "the best solution is resistance so that the enemies of the Palestinians accept the reality and the right of the Palestinian people to have land."

He was speaking in the Muslim holy city of Mecca in Saudi Arabia where he was attending a summit of the Organisation of the Islamic Conference.

After calling for Israel to be "wiped off the map" in October, Iran was chastised by the UN Security Council and drew fierce condemnation from the West -- already alarmed over Iran's nuclear ambitions and ballistic missile programme.

A scheduled visit to Iran by UN Secretary General Kofi Annan was also called off as a result of the remark.

Ahmadinejad's tone has also been a major departure from his pro-reform predecessor Mohammad Khatami, who had eased anti-Western rhetoric and sought to bring Iran out of international isolation by calling for a "dialogue among civilisations".

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