The Egyptian delegate to the talks held under the auspices of the International Commission on Nuclear Non-Proliferation and Disarmament (ICNND) said the discussion was "rather polemical."

But it marked the first reported exchange between senior Israeli and Iranian delegates at an official forum since the the 1979 Islamic revolution.

The Egyptian delegate told AFP that Israel had been represented by former foreign minister Shlomo Ben Ami and Iran by its envoy to the International Atomic Energy Agency, Ali Asghar Soltanieh.

"During the first session Ben Ami and Soltanieh spoke," he said, asking not to be named.

"We had round-table discussions ... then there were cross-table discussions. It was rather polemical, with accusations.

"Soltanieh said the Iranians do not have a (nuclear) bomb and do not want the bomb, but the Israelis said that was not true," the official said, adding that he did not know if the Israelis and Iranians had also met bilaterally on the sidelines.

"This is not the first time (Israelis and Iranians have had contact) but I believe this is the first time they are present at this level of representation," he added.

Israel's Haaretz newspaper said that during the September 29-30 talks the director of policy and arms control of Israel's Atomic Energy Commission, Meirav Zafary-Odiz, had a series of exchanges with Soltanieh.

In one exchange, Soltanieh asked Zafary-Odiz: "Do you or do you not have nuclear weapons," Haaretz said, citing unidentified participants in the meeting. The Israeli smiled but did not respond, the daily said.

Soltanieh insisted Tehran did not hate Jews, although it opposed Zionism, the daily added.

Iran reacted angrily to any suggestion there had been any change in its policy towards the Jewish state.

"The Islamic republic does not recognise the Zionist regime. Moreover it considers this regime a counterfeit and illegitimate one," Iranian Atomic Energy Organisation spokesman Ali Shirzadian said.

"This lie is a kind of psychological operation designed to affect the constant success of Iran's dynamic diplomacy in the Geneva and Vienna meetings," state television quoted Shirzadian as saying on its website.

The spokesman was referring to talks with major powers that Iran held in the two cities in recent weeks on its uranium enrichment programme.

The International Commission on Nuclear Non-Proliferation is an initiative of Australian Prime Minister Kevin Rudd. It has sponsored a series of regional meetings around the world in recent months.

The Cairo meeting was attended by around 30 participants from countries including Egypt, Jordan and Saudi Arabia, as well as Iran and Israel.

In a joint statement issued afterwards, former foreign ministers Gareth Evans of Australia and Yoriko Kawaguchi of Japan said delegates had "examined various options for creating a Middle East zone free of weapons of mass destruction and what circumstances would facilitate such an outcome."

"Short of nuclear disarmament, there was lively debate over the possible shape and potential value of assurances by nuclear weapon states about non-use of nuclear weapons against countries without such weapons," the statement said.

Delegates also "reviewed recent regional developments, including Iran's announcements on its uranium enrichment programme," it added.

Israel has the Middle East's sole if undeclared nuclear arsenal.

It suspects Iran's nuclear programme is cover for a drive for a bomb of its own and has refused to rule out a resort to military action to stop it ever getting one.

Iran insists its nuclear programme is solely for peaceful purposes. It has held two rounds of talks with major powers this autumn aimed at allaying Western suspicions about the purpose of its enrichment activities.

The ICNND is a joint Australian-Japanese initiative. It seeks to reduce the risks of nuclear war by promoting disarmament and combating the spread of atomic weapons, notably in advance of a United Nations treaty review next May.

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.