Israeli atomic energy commission chief Gideon Frank said an Arab initiative to name Israel as a nuclear threat was unacceptable as it was "politically and cynically motivated."

Israel is believed to be the Middle East's only nuclear weapons power with some 200 atom bombs but neither confirms nor denies this.

In an apparent reference to Iran, Frank told a general conference in Vienna of the watchdog International Atomic Energy Agency (IAEA) that "many alarming proliferation developments in the Middle East have occurred in recent years."

"None of these involve Israel but all of them challenge our security," Frank said.

Fifteen Arab states plus Palestinian leaders are asking the conference of the IAEA's 139 member states to put discussion of "Israeli nuclear capabilities and threat" on the agenda.

The group said in a memorandum presented by Oman that "the fact that Israel alone possesses nuclear capabilities, which are undeclared and not subject to international control... constitute(s) a permanent threat to peace and security in the region."

Moroccan ambassador Omar Zniber said Israel's not allowing all its nuclear facilities to be monitored by the IAEA, as it has not signed the nuclear Non-Proliferation Treaty (NPT), "is a serious obstacle" to peace in the region.

Egypt proposed the creation of a nuclear-weapons-free zone in the Middle East and blasted Israel for standing in the way.

Egyptian ambassador Ramzy Ezzeldin Ramzy told the conference that "Egypt will be tabling a draft resolution on... a nuclear-weapon-free zone" and hopes for "a serious international commitment in this area."

Ramzy appealed to IAEA chief Mohamed ElBaradei "to continue his efforts to persuade the country which is standing in the way of the creation of such an area to display good will," in a clear reference to Israel.

The annual IAEA general conference has in past years adopted Egyptian-inspired resolutions for states to work towards a Middle East nuclear-weapons free zone but the texts never mention Israel by name.

Israel has in the past joined in consensus on the resolution, as it promised Wednesday to do again, in return for discussion at the conference of Israel as a nuclear threat being dropped.

Diplomats said the IAEA conference gives Arab states a chance to vent anger at Israel, while preserving consensus at the UN atomic monitoring agency.

Arab states resent the fact that the IAEA is cracking down on Iran for what the United States charges is a covert nuclear weapons program while US ally Israel avoids such scrutiny.

The IAEA's 35-nation board of governors had last week found Iran in non-compliance with the NPT and threatened to take it before the UN Security Council.

Canadian ambassador Ingrid Hall told the conference Wednesday: "We urge Iran to heed the call of the board" to halt nuclear fuel cycle work that could be weapons-related and also to cooperate with an IAEA inspection of the Iranian atomic program.

Frank said the Arab resolution naming Israel as a nuclear threat and "efforts to challenge Israel's credentials... inevitably cast a serious doubt on the sincerity of its sponsors and their willingness to make any real progress towards cooperative security in the Middle East."

Frank said Israel supported "the principle of converting the Middle East into a zone free of all kinds of weapons of mass destruction as well as ballistic missiles."

But he said Israel took issues with this resolution's portrayal of a nuclear-weapons-free zone "as an end in itself rather than as a desirable outcome of a fundamental regional political transformation of relations."

In a report following up on an identical resolution adopted last year, ElBaradei said he has "not been able to make progress" towards creating the nuclear-weapons-free zone.

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