"The international community must do all they can to make sure the soft power options of sanctions and diplomacy prevent the unthinkable," said Lorna Fitzsimons, head of the British-Israel Communications and Research Centre.

Among the report's authors are the development charity Oxfam, the Blairite think-tank the Foreign Policy Centre, along with Unison, Amicus and the GMB -- three of Britain's biggest trade unions.

Also co-authoring the report are religious organisations such as the Muslim Council of Britain, and Pax Christi, an international Christian anti-war charity.

"The consequences of any possible future military action could be wholly counter-productive as well as highly dangerous. Diplomatic solutions to the Iranian nuclear issue must be pursued resolutely," the report says.

It notes several possible negative consequences of military action, including strengthening Iran's resolve to become a nuclear weapons power and the likelihood of Iran's exit from the nuclear Non-Proliferation Treaty.

Armed action would also inflame the war on terror, and could have a direct economic impact on Europe, which -- due to its dependence on Iran for energy -- "could feel the squeeze and possibly even experience recession."

It called for Britain to use its diplomatic clout with the United States to "advocate for direct US engagement" which it says is essential to resolving the current situation.

"It cannot be said that the potential for diplomacy has been explored fully when direct talks between Iran and the US have not taken place," the report says.

The UN Security Council late last year passed a resolution imposing limited sanctions on Iran for its refusal to halt uranium enrichment -- the process that makes nuclear fuel as well as material for making an atomic bomb.

The West, and in particular the United States, fears the nuclear programme is covertly designed to make weapons, while Iran insists it is entirely peaceful.

On Sunday, three ex-senior US military officers -- including a former commander-in-chief at US Central Command -- and leaders in Britain's Christian, Muslim and Jewish faiths said an attack would be "disastrous" for world peace.

In separate letters to the Sunday Times and the Independent on Sunday, they urged the international community to pursue diplomacy, rather than military action, to resolve the stand-off.

They said Britain, and in particular Prime Minister Tony Blair, had a key role to play in dissuading US President George W. Bush from the military option, after reports that both the United States and Israel were planning a strategic strike.

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