Olmert in Germany

"Nothing that we know has changed our attitudes," Olmert told a joint press conference with German Chancellor Angela Merkel. "We are certain the Iranians are engaged in serious clandestine operations to build an unconventional weapon," he said.

Olmert also brushed aside suggestions that Iran was no longer a danger after a US intelligence report in December found that Tehran had halted its nuclear weapons program in 2003.

The Israeli prime minister referred to Iran's continued pursuit of uranium enrichment as justification for his country's belief that Iran was receiving nuclear fuel from Russia for something other than a civilian nuclear program. Olmert said there could be no other reason for Iran's activities.

"The Iranians are moving forward with their plans to create a capacity for non-conventional weapons. There is evidence that the plan of the Iranians is not that naive and innocent," Olmert said. "This is a main challenge. We can't afford to make one mistake on that issue.

"This is mainly the challenge of the big powers; Israel inevitably is ... very interested in these efforts and we will join forces and cooperate with our senior friends in order to help a possible solution that will deter the Iranians from continuing their program," the prime minister added.

Asked whether a military response was still an option, Olmert cited US President George W. Bush as saying that "no option is ruled out."

Support for diplomacy

Merkel said Germany would continue its dual strategy of pressing Iran to comply with the demands of the international community on halting enrichment and of offering economic incentives if it did.

"I have said over and over again that I firmly believe in a solution by diplomatic means and that I am banking on a diplomatic solution," the chancellor said.

Germany, along with the five permanent members of the UN Security Council, was currently working on the text of a third resolution on Iran, she noted.

Olmert also spoke of the Palestinian situation, saying that Israel faced a "very unusual situation" in attempting to conduct negotiations while at the same time coming under attack, not only from Gaza but from other parts of the Palestinian territories.

The prime minister did, however, vow to fight terrorism from Hamas-controlled Gaza "in every possible manner" but refused to directly comment on statements made by Israeli Defense Minister Ehud Barak, who indicated Monday that Israel might try to overthrow the Hamas regime.

Gaza-based terrorism

"The Israeli government under my leadership is absolutely determined to respond to the challenge of terrorism from Gaza in every possible manner which will be effective," Olmert said at the press conference. "We will not hesitate, we will not stop and we will do what's necessary to be done."

In a veiled reference to Barak's statements, Olmert said: "I know that there are lots of speculations...discussions...suggestions and propositions everywhere of what we can do exactly," he added. "That, I'm afraid, I will not share with you."

At the same time, he said Israel "will continue our negotiations with the Palestinian authority" under West Bank-based President Mahmoud Abbas and Prime Minister Salam Fayyad.

Chancellor passes

Merkel refused to criticize Israel's current blockade of Gaza and the restriction of electricity supplies. "I know that the humanitarian situation in Gaza Strip is difficult, and we are trying to help in this regard where we can," she said. "But the simplest answer is that the targeting of the Israeli state, the terrorist activities must be ended," Merkel added.

No one wanted to abuse the humanitarian situation in Gaza, but it was a fact that terrorist acts were being carried out "on the backs" of the people there, she said.