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JERUSALEM | Thu Oct 22, 2009 7:11am EDT

JERUSALEM (Reuters) - Israeli and Iranian nuclear envoys held an unprecedented, if brief, conversation last month at a closed-door Middle East disarmament conference in Egypt, an Israeli official said on Thursday.

Israel and Iran attended a September 29-30 Cairo meeting of the International Commission on Nuclear Non-Proliferation and Disarmament, an unofficial forum established by the Australian and Japanese governments, the group's Web site said.

An Israeli official with knowledge of the talks said that at one point Iran's delegate, Ali Ashghar Soltanieh, asked his Israeli counterpart at the conference, Meirav Zafary-Odiz, about her country's nuclear capabilities.

"She gave her answers, and later the Israeli delegation addressed a question in the same vein to the Iranians, which was answered," the official said, adding that the exchange took place in open session and that the sides did not meet privately.

Iran said no separate meeting took place between the Israeli and Iranian delegations.

Iran's decades-old refusal to recognize Israel has honed global fears over a nuclear project that Tehran insists is peaceful, but that Israelis -- assumed to have the region's only atomic arsenal -- consider a mortal threat.

While world powers try to talk Iran into curbing technology with bomb-making potential, analysts see Israel examining options such as preemptive strikes, enhanced defenses and indirect diplomacy designed to defuse the perceived threat.

Israeli and Iranian envoys often participate in U.N. forums such as the Vienna-based International Atomic Energy Agency, where Soltanieh is Tehran's ambassador.

But the Israeli official said the Cairo talks were unprecedented in that they featured a direct dialogue.

Asked about the exchange, a spokeswoman for Israel's Atomic Energy Commission, where Zafary-Odiz has a senior position, said: "Such an event did take place." She gave no further details.

Word of the meeting resurfaced in Israeli daily Haaretz on Thursday after Australian newspaper The Age broke it last week.

The U.N's nuclear watchdog on Wednesday presented a draft deal to Iran and three world powers for approval by Friday.

Israel does not discuss its nuclear capabilities under an "ambiguity" policy billed as warding off enemies while avoiding the kind of public provocations that can trigger arms races.

Successive Israeli government have voiced interest in entering a regional disarmament regime once a comprehensive peace arrangement was reached in the Middle East.

(Additional reporting by Alastair Sharp in Cairo and Fredrik Dahl in Tehran; Editing by Samia Nakhoul)

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