The recommendation was one of 60 put forward in a report prepared by the 14-member Weapons of Mass Destruction Commission, an initiative of the Swedish government set up in 2003.
Hans Blix, who led the UN search for chemical, biological and nuclear weapons in Iraq before the US-led invasion, presented the report to Kofi Annan, the UN secretary-general.
Blix said a nuclear-free Middle East would be possible if states in the region, including Israel, rejected nuclear activities. In an interview with Aljazeera, he also urged the US and other nuclear-armed nations to set an example by scrapping weapons of mass destruction.
In the introduction to the report, Blix said: "If it takes the lead, the world is likely to follow. If it does not take the lead, there could be more nuclear tests and new nuclear arms races."
Yet Blix said that the US had "looked more to its own military power for remedies" instead of strengthening international treaties and institutions.
Blix also revealed the number of nuclear weapons that Israel is believed to possess.
"Israel should commit itself not to make more plutonium, they are assumed to have 200 nuclear weapons," Blix said.
Israeli officials have never openly discussed the nature of their nuclear programme or its nuclear arsenal.
Blix cautioned against military attempts at regime change to solve the nuclear issues involving North Korea and Iran.
"These weapons are dangerous in anybody's hands"
"In such states, incentives to acquire nuclear weapons may be reduced by offers of normal relations and assurances that military intervention or subversion aimed at regime change will not be undertaken," the report said.
Blix also said it was important to recognise the depth of national pride that Iranians feel about their nuclear achievements.
The report rejected the argument that nuclear weapons were dangerous only in the hands of "rogue states".
"These weapons are dangerous in anybody's hands," Blix said.
The 231-page report called for continued international negotiations with Iran to continue in an attempt to convince it to end its nuclear enrichment programme.
The report urges India and
Pakistan to end nuclear testing
The commission report also called for an international agreement to hold North Korea to its 1992 committment to keep the Korean peninsula free of nuclear weapons.
It said major powers acknowledging nuclear arsenals should provide legally binding assurances to those countries without atomic weapons that they will not come under nuclear attack.
The report urges nuclear powers that have not ratified the comprehensive global test ban treaty, including India and Pakistan, to do so.
It pressed Russia and the United States to agree on mutual steps "to take their nuclear weapons off hair-trigger alert" and start negotiations on a new treaty aimed at reducing their strategic arms by at least half.
Weapons of Mass Destruction Commission