Saudi Arabia has demanded at the Munich security conference that Iran be punished, saying that the country was propping up the Syrian government, developing ballistic missiles and funding separatists in Yemen.

Adel al-Jubeir, the Saudi foreign minister, on Sunday described Iran as the main sponsor of global "terrorism" and a destabilising force in the Middle East.

"Iran remains the single main sponsor of terrorism in the world," he told delegates at the conference.

"It's determined to upend the order in the Middle East ... [and] until and unless Iran changes its behaviour, it would be very difficult to deal with a country like this."

The international community needed to set clear "red lines" to halt Iran's actions, Jubeir said, calling for banking, travel and trade restrictions aimed at changing Iran's behaviour.

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For his part, Avigdor Lieberman, the Israeli defence minister, said Iran's ultimate objective was to undermine Saudi Arabia and called for a dialogue between Israel and Arab countries to defeat "radical" elements in the region.

"The real division is not Jews, Muslims ... but moderate people versus radical people," he told the Munich conference delegates on Sunday.

Mevlut Cavusoglu, Turkey's foreign minister, also criticised what he called Iran's "sectarian policy" aimed at undermining Bahrain and Saudi Arabia.

"Turkey is very much against any kind of division, religious or sectarian," he said.

'Brothers in Islam'

The comments followed an appeal from Mohammad Javad Zarif, Iranian foreign minister, for Arab Gulf states to work with his country to reduce violence across the region.

"We have enough problems in this region so we want to start a dialogue with countries we call brothers in Islam," he said.

Zarif dismissed any suggestions his country would ever seek to develop nuclear weapons.

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When asked about the new US administration's tough rhetoric on Iran's role in the region and calls to review the nuclear deal, he said Iran did not respond well to threats or sanctions.

US Senator Lindsey Graham, a South Carolina Republican, said he and other senators were preparing legislation to further sanction Iran for violating UN Security Council resolutions with its missile development programme and other actions.

"It is now time for the Congress to take Iran on directly in terms of what they've done outside the nuclear programme," he said.

'Emerging proxy war'

Senator Christopher Murphy, a Democrat and member of the Senate Foreign Relations Committee, said the US needed to decide whether to take a broader role in the regional conflict.

"We have to make a decision whether we are going to get involved in the emerging proxy war in a bigger way than we are today, between Iran and Saudi Arabia," he said.

International sanctions on Iran were lifted a year ago under a nuclear deal with world powers.

However, Republican senators said at the conference they would press for new US measures over the missiles issue and what they called Iran's actions to "destabilise" the Middle East.