* Germany one of six powers in stalled talks with Tehran
* Foreign minister says still time for diplomatic solution
* Deems "talks for sake of talks" with Iran unacceptable
JERUSALEM, Sept 9 (Reuters) - Germany's foreign minister urged Iran on Sunday to bring "substantial offers" to restart nuclear negotiations with world powers and assured Israel that allowing the Islamic Republic to get the bomb was "not an option".
"We share the concern in Israel about the nuclear programme in Iran," Guido Westerwelle told reporters before talks with Israeli Defence Minister Ehud Barak.
His visit to Jerusalem followed weeks of heightened rhetoric in Israel over a possible go-it-alone strike against Iran's nuclear facilities and repeated calls by Prime Minister Benjamin Netanyahu for world powers to set a "red line" for Tehran.
Westerwelle, whose country, together with France, Britain, Russia, China and the United States, has held three rounds of inconclusive talks with Iran this year, said there was still time for a diplomatic solution.
"But it is serious, and it's crucial, and this means that talks for the sake of talks is not what we are seeking," he said.
"And therefore, we call the government in Iran to come back to the table with substantial offers, which is very necessary and very crucial at this time," Westerwelle said.
"Nuclear weapons in the hands of Iran is not an option," he added.
At a meeting of European Union foreign ministers in Cyprus on Friday, Germany, Britain and France called for new EU sanctions against Iran.
The ministers did not say what further measures the EU could take after the bloc already banned imports of Iranian oil and isolated its banking system in the last round of sanctions that came into full force in July.
The sanctions appear to have contributed to a collapse in the Iranian currency which plunged to an all-time low on Sunday. Central Bank Governor Mahmoud Bahmani said: "We are fighting with the world in an economic sense."
"The conditions we are in are war conditions," Bahmani said, according to the Iranian Students' News Agency.
The sanctions are aimed at forcing Iran to curb nuclear activities that the West believes are aimed at developing atomic weapons capability, an allegation Tehran denies.
Iran says its nuclear work is for peaceful energy purposes and that it will not bend to pressure from the West.
Israel, believed to be the only nuclear-armed state in the Middle East, sees the possibility of Iran developing an atomic bomb as a threat to its existence and has said it may use military means if diplomacy and sanctions fail.
Addressing his cabinet on Sunday, Netanyahu hailed Canada's decision on Friday to cut diplomatic relations with Iran over its nuclear activities.
"I call on the entire international community, or at least on its responsible members, to follow in Canada's determined path and set Iran moral and practical red lines, lines that will stop its race to achieve nuclear weapons," Netanyahu said.