Iran and Israel in bitter clash at U.N. watchdog debate

By Mark Heinrich and Karin Strohecker

VIENNA (Reuters) - Iran demanded on Friday that U.N. inspectors visit Israel to investigate its nuclear capability while Israel accused Tehran of lying in a bitter debate at an assembly of the U.N. atomic watchdog.

The debate was sought by Arab and Islamic states after they shelved a resolution to brand Israel an atomic "threat" in the face of a likely Western maneuver to block a floor vote.

Israel is widely assumed to have the Middle East's only atomic arsenal, though it has never confirmed or denied this. It is also one of just three states to shun the nuclear Non-Proliferation Treaty, along with India and Pakistan.

Iran is under U.N. Security Council sanctions for refusing to halt a nuclear energy program feared by major powers to be a covert attempt to build atom bombs. Tehran's Islamist leaders have called for Israel's destruction.

At the annual assembly of the 149-member International Atomic Energy Agency, Arab countries and Iran railed at "persistent international double standards and silence" over Israeli nuclear exclusivity in the Middle East.

They repeatedly lambasted what they said was Israeli Prime Minister Ehud Olmert's admission of a nuclear arsenal in a German media interview last December. Israeli officials later denied Olmert said any such thing, tacitly or openly.

ACCUSATIONS OF LYING

"Some speakers continue to lie about the statement of the Israeli prime minister, who did not say what they say he did," said Israel Michaeli, Israeli Ambassador to the IAEA.