Israel backs Iran sanctions but says might act

JERUSALEM (Reuters) - Israeli Defence Minister Ehud Barak said on Thursday he favored the use of diplomatic pressure and sanctions against Iran's nuclear program but cautioned that Israel was "not afraid to take action".

"Currently, the focus is international sanctions and vigorous diplomatic activity, and these avenues should be exhausted," Barak said in a speech.

But he added: "Israel is the strongest country in the region and has proved in the past it is not afraid to take action when its vital security interests are at stake."

Barak, leader of the centre-left Labour party, made the comments two days after an aide to Iran's Supreme Leader was quoted as saying his country would hit Tel Aviv, U.S. shipping in the Gulf and U.S. interests in reply to any military strike.

Barak's remarks did not depart from previously stated Israeli policy, but speculation that Israel -- which fears Iran is seeking to build atomic weapons -- could bomb Iranian nuclear installations has mounted since a big Israeli air drill in June.

Iran has said it is enriching uranium as part of a program to generate electricity.

Israeli Prime Minister Ehud Olmert said in a speech in Washington last month that "the Iranian threat must be stopped by all possible means." He also called at the time for stronger international sanctions on Iran.

(Writing by Jeffrey Heller, Editing by Adam Entous)