"This was not a mis-statement or a passing remark," Israeli Foreign Minister Silvan Shalom told Israel Radio on Friday. "It is a systematic way of thinking which is intended to bring about the annihilation of the state of Israel."
On Thursday Iranian President Mahmoud Ahmadinejad said that if Germany and Austria believed that Jews were massacred during the second world war, a state of Israel should be established on their soil.
Ahmadinejad, who said in October that Israel must be "wiped off the map", was being interviewed on Al-Alam, an Iranian state satellite channel while in Makka, Saudi Arabia, where he was attending a summit of the Organisation of the Islamic Conference.
According to a translation of his comments carried by the AFP newsagency, he said: "You believe the Jews were oppressed, why should the Palestinian Muslims have to pay the price?
"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.
Silvan Shalom said Ahmadinejad's
remark was not a mis-statement
"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.
"Why do they insist on imposing themselves on other powers and creating a tumour so there is always tension and conflict?"
The comments sparked swift condemnation from Israel and around the world.
Mark Regev, the Israeli Foreign Ministry spokesman, said: "Unfortunately this is not the first time that the Iranian leader has expressed outrageous and racist views towards Jews and Israel.
"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."
Asked whether Ahmadinejad could be compared to Libya's Muammar Gaddafi, once among Israel's most implacable foes, Shalom said: "I would not take him lightly. Such a statement displays a way of thinking which shows he is very dangerous."
UN Secretary General Kofi Annan expressed "shock" over Ahmadinejad's remarks while British Foreign Secretary Jack Straw described them as "unacceptable".
Scott McClellan, the White House spokesman, condemned the remarks. "It just further underscores our concerns about the regime in Iran," he said. "And it's all the more reason why it's so important that the regime not have the ability to develop nuclear weapons."
Kofi Annan said he was shocked
at Ahmadinejad's comments
Germany's Chancellor Angela Merkel said Ahmadinejad's suggestion that Israel was "totally unacceptable".
Wolfgang Schuessel, the Austrian chancellor, said after a meeting with President Bush, that the remarks were "an outrageous gaffe, which I want to repudiate in the sharpest manner".
Frank-Walter Steinmeier, Germany's foreign minister, 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".
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".
Analysts added Ahmadinejad had knowingly played up to radicals within the regime by risking increased international isolation with his latest anti-Israeli remarks.
"By provoking the world against Iran, a climate is created in which radicalism can breathe easier"
"The repetition of this kind of speech cannot be accidental or be explained by his political experience," said political analyst Saed Leylaz.
Ahmadinejad's statemetents are: "without doubt an aim of domestic policy since by provoking the world against Iran, a climate is created in which radicalism can breathe easier."