But in a pointed and political call to more than 40 heads of state and national leaders attending the conference, he said: "What is not reversible is the acquisition of nuclear weapons by a fanatic radical regime committed to a pre-medieval view of the world. We have never had, since the dawn of the nuclear age, nuclear weapons in the hands of such a fanatical regime." His comments, clearly designed to bolster his standing in the imminent polls in Israel, he said any efforts worldwide to secure peace in the Middle East would fall apart if Tehran managed to arm itself with nuclear weapons.

Mr Netanyahu was speaking on a panel on leadership which included the British Opposition Leader, Conservative David Camero. The Israeli said that three qualities were needed to successfully lead a nation: courage, power that is usable and a level of vision. "Unless you have the big three - the vision, the power and the guts - it is not going to happen," he said. Mr Netanyahu insisted that he wanted to "move rapidly to advance a workable peace" with moderates in the Palestinian Authority and said the Iranian arms race was the greatest challenge facing the leaders of the 21st century."

Iran has consistently denied that it is moving towards nuclear armament, insisting the push is for energy and peaceful use instead. Mr Netanyahu used the forum discussion to float his proposed economic stimulus package for Israel, signalling tighter government spending, tax cuts and increased competitiveness including major infrastructure construction.

"My vision is that we can use this crisis to complete reforms so that Israel becomes one of the ten most competitive economies in the world," he said. The most recent polls suggest that Likud and other tough talking parties will win a majority in the parliament, giving Mr Netanyahu a strong chance of forming a government after the February election. However during a discussion on Central Asia and the Caucuses on Thursday, Iran's Foreign Minister, Manouchehr Mottaki, signalled a positive response from his nation if the new US President, Barack Obama's promises on a new tack in foreign policy changes are "genuine".

He said nations of his region are waiting to see if the US leadership is offering strategic or just rhetorical change: "We do believe that if the new administration of the United States, as President Obama has said, is going to change its policies, not in talking but in acts, then definitely it will find in the region a creative and cooperative reaction, including from Iran." He said his country's 3000-year history had shown that the Iran's relationships with its neighbours are based on peaceful coexistence and had helped work towards "stability and security which we consider to be in our interests, as well as in those of other countries in the region".