John Chipman, director of the International Institute for Strategic Studies (IISS) in London, said Turkey and Saudi Arabia could be among the countries that would "reconsider their options" if Tehran built a bomb.

His comments, at the launch of the IISS's annual Military Balance report, came after Prime Minister Tony Blair warned that life for Tehran could become "a lot more difficult" if it continued to defy the international community.

The IISS report said it appeared "unlikely" at this stage that diplomatic efforts by Britain, France and Germany to persuade Iran to give up its uranium enrichment programme -- a key stage in developing a weapon -- would succeed.

"I think where that issue is salient is in discussions of what might happen in the regional balance of power were Iran one day to have a confirmed and deployed nuclear weapons capacity," Chipman said.

"If that were to become the case, the general expert consensus is that at a very minimum, a number of regional countries -- perhaps including Turkey, Egypt and Saudi Arabia -- would have to, in the celebrated phrase, 'reconsider their position'.

"It is for that reason that so many countries are concerned to ensure that the Iranian nuclear program remains totally and confirmably civilian in nature."

Tehran insists that its nuclear programme is purely for civilian energy use.

Chipman said it was essential that other countries, besides the United States and the three big European Union powers, join in the international pressure on Iran.

"It would be desirable for regional states, especially the Gulf Arab states, also to express more openly their concerns about how Iran's possible acquisition of a nuclear capacity would change strategic perceptions and the regional balance of power," he told reporters.

With Iran thought to be a decade away from acquiring a nuclear weapon, Chipman said there was still time for diplomacy to succeed.

The International Atomic Energy Authority (IAEA) has agreed to refer the case to the UN Security Council, which in turn could impose sanctions, but it has yet to set a date to do so.

Such a move is being opposed by Russia, China and India amid fears that it could begin "a slippery slide down the road to war", said Chipman at the IISS headquarters in central London.

But he said that could change if IAEA director general Mohammed ElBaradei can present evidence on the development of Iran's Shahab-3 missile, which has "a payload ideally suited to a nuclear weapon".

Another option currently being explored was an agreement to allow Iran to carry out nuclear fuel conversion work on Russian soil as a way of allaying international concerns about its intentions.

Speaking on Sky News television Monday, Blair said: "Iran has to realise that there is the possibility of having a different relationship with the Western world but only on the basis of certain very clear things.

"If they don't do this then I think they should understand it is very difficult for people to have a different relationship with them," he said.

"And if they continue to do it, they continue to really defy proper rules of behaviour in the international community, then life will become a lot more difficult."

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