France, Spain, Britain, Canada and Australia condemned the Iranian leader's remarks and the European trio said their foreign ministries would summon Iranian envoys and demand an explanation.
On Wednesday at a conference in Tehran entitled: The World without Zionism, Iranian President Mahmoud Ahmadinejad said Israel's establishment was "a move by the world oppressor against the Islamic world".
"As the Imam said, Israel must be wiped off the map," he added, referring to Iran's late revolutionary leader Ayatollah Khomeini.
Reacting to the comments in an open letter to Israeli prime minister Ariel Sharon, Deputy Prime Minister Shimon Peres said Iran posed a "clear and present danger".
"We must submit a clearcut request to the UN secretary general (Kofi Annan) and the Security Council to obtain Iran's expulsion from the United Nations," Peres said.
Israeli Foreign Minister Silvan Shalom said he believed the Iranian leaders comments reflected an effort by Tehran to "buy time ... so it can develop a nuclear bomb."
Responding to Ahmadinejad's comments, French Foreign Minister Phillippe Douste-Blazy said in a statement that "if these (reported) comments are true, they are unacceptable. I condemn them with the greatest firmness."
Ahmadinejad spoke at a forum
against Zionism on Wednesday
In Madrid the Spanish Foreign Ministry said " ... Foreign Minister Miguel Angel Moratinos has expressed his rejection in the most emphatic terms and has decided to urgently call in the Iranian ambassador to ask him for an explanation".
In the UK, a British Foreign Office spokesman described the Iranian leader's comments as "deeply disturbing and sickening."
"We have seen in Israel today the horrible reality of the violence he is praising," he said, referring to a Palestinian bombing in the Israeli town of Hadera that killed five people and wounded 30.
"Saying Iran wants to wipe Israel from the map will only heighten concerns about Iran's nuclear ambitions ... We will be protesting to the Iranian charge d'affaires," he said.
Canadian Foreign Minister Pierre Pettigrew told reporters "We cannot tolerate comments of such hatred, such anti-Semitism, such intolerance. And these comments are all the more troubling given that we know of Iran's nuclear ambitions."
Muslim states warned
Ahmadinejad's comments were the first time in years that such a high-ranking Iranian official has called for Israel's eradication, even though such slogans are still regularly used at government rallies.
"Anyone who signs a treaty which recognises the entity of Israel means he has signed the surrender of the Muslim world"
Iranian President Mahmoud Ahmadinejad
"Anyone who signs a treaty which recognises the entity of Israel means he has signed the surrender of the Muslim world," Ahmadinejad said.
"Any leaders in the Islamic umma who recognise Israel face the wrath of their own people."
Ahmadinejad, a veteran of Iran's hardline Revolutionary Guards, took office in August after scoring a landslide win in a June presidential election.
His tone represents a major change from that of former president Mohammad Khatami, whose favoured topic was "dialogue among civilisations" and who led an effort to improve Iran's relations with the West.