Israeli Prime Minister Ehud Olmert said on Tuesday Iran was still seeking to build nuclear weapons and called for a greater international effort to prevent Tehran from succeeding.

We are certain that the Iranians are engaged in a serious ... clandestine operation to build up a non-conventional capacity, Olmert said at a joint news conference with German Chancellor Angela Merkel after a meeting.

Israel, widely believed to have built hundreds of atomic warheads, has said it considers a nuclear Iran a threat to its existence.

Olmert said he was sharing information with other countries about Iran's nuclear program. He later told journalists he had discussed the issue at length with Merkel during their talks on Monday and Tuesday.

As (U.S.) President (George W.) Bush once said: no option is ruled out, in dealing with Iran's atomic ambitions, he said, while voicing support for a diplomatic solution.

Bush and Olmert have made clear they still consider Tehran a threat despite a recent U.S. National Intelligence Estimate that said Iran stopped its nuclear weapons program in 2003.

Briefing journalists who traveled with him from Israel to Germany, Olmert declined to estimate when Iran -- which says it is only seeking nuclear energy -- might have an atomic arsenal.

I have said many times in the past ... and the latest intelligence reports bear this out, that Iran is not as close as it contends to achieving a non-conventional weapons capability but it is not as far from it as we would like, Olmert said.

Last month, Germany joined the five permanent U.N. Security Council members -- Britain, China, France, Russia and the United States -- in circulating a proposal for a third sanctions resolution against Iran calling for mandatory travel bans, asset freezes and vigilance on all banks in Iran.

I have always said that I believe strongly in a solution via diplomatic channels, that I count on a diplomatic solution and nothing else, Merkel told the news conference.

PRESSURE ON GAZA

Turning to the situation in the Gaza Strip, Olmert said Israel would keep pressure on Hamas militants but did not disclose whether political leaders of the Islamist group running the territory would be attacked.

Israeli leaders have vowed to step up their operations against Hamas in a bid to halt the cross-border rocket fire. But Defence Minister Ehud Barak said earlier a full-scale military campaign against the group would not take place right away.

The daily rocket barrages rarely cause serious casualties but they have disrupted life in southern Israel.

Hamas says attacks from the Gaza Strip, including rockets fired by its own militants and others are a response to Israeli military operations in the territory and in the occupied West Bank and would end if Israel stopped all such activity.

Olmert reiterated he would continue to pursue peace talks with Palestinian President Mahmoud Abbas and intended to meet him next week, despite the ongoing Gaza violence.

I see no Israeli interest that justifies a delay or suspension of peace negotiations, Olmert said, repeating that he still hoped for a deal with Abbas by the end of the year.

Merkel said the humanitarian situation in Gaza -- home to 1.4 million Palestinians -- was difficult.

Israel tightened restrictions on the Gaza Strip after Hamas seized control in June after routing Abbas's Fatah forces.

Merkel said Israel and Germany would start regular government consultations, with a first meeting in March.

(Writing by Jeffrey Heller and Kerstin Gehmlich; Editing by Sami Aboudi)

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