Israel is undermining Jordan's efforts to establish a nuclear programme that would help the country, which has one of the smallest economies in the Arab world and almost no natural resources, to become fuel sufficient, Jordan's King Abdullah said.

"Strong opposition to Jordan's nuclear energy programme is coming from Israel," the monarch told Agence France Presse in an interview.

"When we started going down the road of nuclear energy for peaceful purposes, we approached some highly responsible countries to work with us. And pretty soon we realised that Israel was putting pressure on those countries to disrupt any cooperation with us," King Abdullah said. "A Jordanian delegation would approach a potential partner, and one week later an Israeli delegation would be there, asking our interlocutors not to support Jordan's nuclear energy bid," he added.

The two countries signed a peace treaty in 1994, however relations have been strained at various junctures because of the protracted peace process and a right wing government in Israel headed by Prime Minister Benjamin Netanyahu, that has refused to halt the construction of settlements.

Jordan imports almost all of its energy needs and finances its budget and current-account deficits with foreign investment and grants from Gulf states, the EU and the US. The kingdom's public debt-to-GDP ratio increased to about 64 percent at end 2011.

Jordan's fiscal deficit could rise to JRD2.93bn (US$4bn) this year if economic conditions in the country do not improve, the Jordan Times reported, citing Minister of Finance Suleiman Hafez. The kingdom's debt would rise to JRD17.5bn by the end of the year from JRD14.3bn.

The overall budget deficit increased to about 6 percent of GDP in 2011 as a result of commodity subsidies, other social spending and borrowing by the government on behalf of Jordan’s National Electric Power Company to cover more costly imported fuel oil used during extensive periods of interrupted natural gas supply when saboteurs attacked pipelines in Egypt.

"Jordan remains highly dependent on commodity imports oil and grains, tourism receipts, remittances and FDI flows, and external grants,'' the International Monetary Fund said in a report in April. The kingdom "is also facing risks from a further deterioration in its terms of trade, unrest in neighbouring countries, and the prospect of further disruptions to natural gas pipeline flows from Egypt," it added.

Jordan's economy is forecast to grow 2.8 percent this year from an estimated 2.5 percent in 2011, while inflation is projected to rise to 4.9 percent from 4.4 percent last year, according to the IMF. Government subsidies in total account for about JRD2.386bn annually. The treasury incurs JRD40m a year for every US$1 above the price of US$100 a barrel of oil.

Multiple attacks on a pipeline that supplies gas from Egypt to Jordan and Israel disrupted supplies and increased the kingdom's energy bill pressuring the country to speed up ways to find alternatives that would make less dependent on the import of its energy needs.

The kingdom is considering a bid by a consortium led by French firm Areva and Japan's Mitsubishi and a proposal by Russia's Atomstroyexport to build the country's first nuclear plant, according to AFP.