Gordon Brown today balanced a threat of new sanctions against Iran with a tough message that Israel should do more to help improve the lives of ordinary Palestinians.

Describing himself as a "friend of Israel," the Prime Minister used the first ever speech by a British leader to the Knesset to condemn statements by the Iranian President which appeared to threaten to destroy Israel.

Mr Brown combined his criticism of Iran with a pledge to form an alliance with Tel Aviv against terrorism, the strongest statement of friendship towards Israel since Mr Brown took power.

However, he balanced his message by claiming the Palestinian leadership in the West Bank, headed by President Mahmoud Abbas, were the "best partners in a generation" with which to negotiate peace, and urged Israel not to expand settlements - a call greeted with jeers from a minority in the building.

Mr Brown used the majority of his speech, however, to talk about his friendship with Israel, and pledged never to allow Iran to develop nuclear weapons.

"We say with one voice: it is totally abhorrent for the president of Iran to call for Israel to be wiped from the map of the world," he said.

"Our country will continue to lead, with the United States and our European partners, in our determination to prevent an Iranian nuclear weapons programme. We stand ready to lead in taking further sanctions, and will ask the whole international community to join us.

"Iran has a clear choice to make: suspend its nuclear weapons programme and accept our offer of negotiations, or face growing isolation and the collective response, not just of one nation, but of all nations round the world."

This morning, The Times reported that Tehran faced a series of sanctions against its oil and gas industries unless it halts attempts to develop its atomic capacity. Diplomatic sources said that the US and Britain had agreed on setting a deadline for Iran of two weeks for the Islamic Republic to halt the enriching of uranium.

The Prime Minister was heckled when he raised the need for the halting of settlement-building in the occupied West Bank. He called on Israel to agree to "freezing and withdrawing from settlements" and to do more to help the Palestinians improve their economy.

"Without compromising your needs for security, we need your help in easing the obstacles to Palestinian economic growth," he said.

Although veiled, the remark was a clear reference to one of the main Palestinian complaints against Israel: that of security checks and restrictions which severely limit economic opportunities in the occupied territories.

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