TEL AVIV, Israel (AP) _ A nuclear-capable Iran would pose a grave danger to the world, Israel said Sunday as it urged the European Union and the international community to help prevent that ``nightmare scenario'' from becoming reality.

Israeli Foreign Minister Silvan Shalom discussed the concerns in a meeting with EU foreign policy chief Javier Solana, fresh from talks in Tehran.

``Iran's nuclear program is a grave threat, not only to Israel but to Europe and the whole free world,'' Shalom said after the meeting. ``Iran is fast approaching the point of no return in its efforts to acquire nuclear weapons capabilities.''

Iran insists it is not seeking to make atomic weapons and that its nuclear programs are for generating electricity, but Israel and the United States have expressed concern. The United States alleges Iran has been secretly developing nuclear weapons.

While in Iran, Solana urged President Mohammad Khatami to clear up questions about the Iranian nuclear program and allow unfettered inspections of related sites.

Mohammed ElBaradei, chief of the International Atomic Energy Agency, has said traces of weapons-grade uranium were found at a nuclear facility at Natanz in central Iran.

``It is evident and crucial that Europe and the entire international community act to ensure this nightmare scenario is prevented for the benefit of all nations,'' Shalom said.

Israel has never confirmed being a nuclear power, but it is widely believed to have nuclear weapons.

Shalom and Solana also discussed the rapidly deteriorating situation in Israel and the Palestinian territories, and Solana urged the sides to move forward with the internationally backed ``road map'' to peace, which envisions the creation of a Palestinian state within three years.

The plan has been sidetracked by an Aug. 19 suicide bombing that killed 21 in Jerusalem and a series of Israeli missile strikes since then that have killed 10 Hamas members.

``The road map is the only document on the table and I hope all sides would seek to move this forward,'' Solana said.

Shalom also called on the EU to change its policy regarding the Islamic militant group Hamas. The EU has put the Hamas military wing, Izzedine al Qassam, on its list of terrorist organizations, but has resisted American appeals to ban the group's political wing.

Last week, President Bush froze the financial assets of six top officials of Hamas as well as five European charities that allegedly send cash to the militants.

Solana said European leaders would discuss taking financial steps against Hamas at a meeting later this week.

``Any organization that carries out terrorist acts is of course a terror organization. We are going to try do the utmost to stop these kind of organizations, including Hamas, from having access to resources,'' Solana said.