And he warned that the UK was determined to prevent Iran developing nuclear weapons.

The British leader described Iranian president Mahmoud Ahmadinejad's call for Israel to be wiped off the map as "abhorrent".

And he said Tehran must abandon its nuclear programme or face "growing isolation".

On the second day of his 48-hour visit to Israel, he told members of the Knesset that the UK, the European Union and the United States were determined to prevent an Iranian nuclear weapon - Israel's key strategic fear.

Britain was prepared to impose new sanctions to isolate Iran if it did not abandon its nuclear programme and stop threatening Israel.

In his Knesset address, he added: "To those who question Israel's very right to exist and threaten the lives of its citizens through terror, we say, 'The people of Israel have a right to live here, to live freely and to live in security'."

Britain, he said, "stands ready to lead in taking further sanctions and will ask the whole international community to join us".

He went on: "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 around the world."

The prime minister told the Knesset that he believed a "hard-won and lasting peace" between Israel and the Palestinians "is within Israel's grasp," and declared his support for a two-state solution based on the 1967 borders, with Jerusalem as a "capital for both".