Israel urges "crippling" sanctions now against Iran

JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu called for immediate and "crippling" sanctions against Iran on Tuesday, as it began making higher-grade nuclear fuel in defiance of international censure.

"Iran is racing forward to produce nuclear weapons ... I believe that what is required right now is tough action by the international community," Netanyahu told European diplomats.

"This means not moderate sanctions, or watered-down sanctions. This means crippling sanctions and these sanctions must be applied right now," he said in a short message to underscore Israel's concern over the latest developments.

Netanyahu's language implied Israel would not be content with so-called "targeted sanctions" which Western diplomats have predicted could be pursued against the Iranian Revolutionary Guards and other assets of the Tehran leadership.

Despite Iranian denials, Western powers fear Iran is enriching uranium with a view to producing bombs.

"In the last two days the brutal regime in Tehran has made more outrageous statements including the implicit call for the extermination of my country," Netanyahu told the EU ambassadors.

He did not repeat veiled threats Israel has made in the past to attack Iran's nuclear facilities in a pre-emptive strike.

Israel is assumed to have the region's sole atomic arsenal.

"MORE THAN WORDS"

Iranian state television on Tuesday quoted Iran's nuclear energy chief, Ali Akbar Salehi, as saying uranium enrichment to the higher 20 percent level had started in the Natanz facility under the supervision of the International Atomic Energy Agency.

This followed a failure to agree terms for a proposed nuclear swap with major powers, under which Iran would send most of its low-enriched uranium abroad in return for such fuel.

Iran currently enriches uranium to a level of 3.5 percent while 80 percent or more is needed for a nuclear bomb.

The Pentagon has said the United States wants the U.N. Security Council to approve a resolution "within weeks, not months," laying the ground for new sanctions against Iran over its nuclear program. They would be the fourth set of sanctions.

Spain's ambassador to Israel, Alvaro Iranzo, said the EU condemned Tehran's Holocaust denials and calls for the destruction of the Jewish state. The 27-nation bloc wanted assurance that Iran's atomic ambitions were peaceful, he said.

"I think what is required is a lot more than words," Netanyahu told the gathering of envoys.

He said Iran was acting "in brazen defiance of the international community, and the international community must decide if it is serious about neutralizing this threat to Israel, the region and the entire world."

(Additional reporting by Dan Williams; Writing by Jeffrey Heller, Editing by Robin Pomeroy)