"The EU condemns unreservedly President Ahmadinejad's call for the eradication of Israel and his denial of the Holocaust," said the conclusions, which were due to be adopted later Friday.

"The comments are wholly unacceptable and have no place in a civilised political debate," they added.

Ahmadinejad unleashed a wave of condemnation from world leaders this week after he described the Holocaust as a myth and called for the state of Israel to be moved as far away as Alaska.

The EU leaders urged Tehran to "join the international consensus on the need of a two state solution to the Palestinian-Israeli conflict."

They also called for Iran "to support the search for peace between Israel and its neighbors and to end the support for groups which advocate or engage in acts of terrorism".

Those remarks, which come after similar comments in recent months, have stoked growing alarm in Europe and added to concerns about Iran's nuclear ambitions.

Amid a long-running standoff with Tehran over its nuclear programme, EU leaders warned time was running out for a diplomatic solution.

"The European Council is gravely concerned at Iran's failure to build confidence that its nuclear program is exclusively peaceful," they said in conclusions of their summit focused primarily on the bloc's budget.

"While the EU continues to work for a diplomatic solution, the window of opportunity will not remain open indefinitely."

The statement comes ahead of a EU-Iran meeting next Wednesday in Vienna, but European and Western diplomats say there is little hope of progress in getting Tehran to abandon nuclear fuel work that raises concerns it seeks to make nuclear weapons.

The Vienna-based UN watchdog International Atomic Energy Agency (IAEA) has found Iran in non-compliance with the Non-Proliferation Treaty (NPT) for almost two decades of hidden nuclear activities, a finding that requires eventual referral to the Security Council, which can impose sanctions.

The IAEA in November put off taking Iran to the Council after Britain, France and Germany -- which have been leading the European diplomatic effort -- agreed to give more time for new Russian diplomacy to work.

Iran insists its nuclear program is a peaceful effort to generate electricity and that it therefore has the right to enrich uranium on its territory.

Enrichment makes what can be fuel for nuclear power reactors but also the raw material for atom bombs.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.