Germany's Merkel likens Iran threat to Nazi era

MUNICH, Germany Feb 4 (Reuters) - German Chancellor Angela Merkel likened Iran's nuclear plans on Saturday to the threat posed by the Nazis in their early days, as top U.S. officials urged a tough line to stop Tehran from making an atomic bomb.

U.S. Defense Secretary Donald Rumsfeld accused the Islamic republic of being the world's leading sponsor of terrorism, a charge his Iranian counterpart rejected as "ridiculous" and "outrageous".

Addressing the annual Munich security conference, Merkel said countries around the world had underestimated the Nazi threat as Adolf Hitler rose to power.

"Looking back to German history in the early 1930s when National Socialism (Nazism) was on the rise, there were many outside Germany who said 'It's only rhetoric -- don't get excited'," she told the assembled world defense policy makers.

"There were times when people could have reacted differently and, in my view, Germany is obliged to do something at the early stages ... We want to, we must prevent Iran from developing its nuclear programme."

As she was speaking a few hundred metres (yards) from the Munich pub where Hitler launched his "Beer Hall Putsch" in 1923, the board of governors of the U.N.'s International Atomic Energy Agency voted in Vienna to report Iran to the U.N. Security Council over concerns it is secretly trying to develop nuclear weapons.

Iran says its nuclear programme is purely aimed at civilian energy production.

But Iranian President Mahmoud Ahmadinejad has compounded concerns in the West and elsewhere with recent comments denying that the Nazi Holocaust happened and calling for Israel to be "wiped off the map".

Post-war Germany, conscious of the Nazis' crimes, has made support for Israel a pillar of its foreign policy and Merkel said her country could not tolerate Ahmadinejad's stance.

SENATORS JOIN ATTACK

U.S. Senator Joseph Lieberman applauded Merkel and urged the world to take the Iranians seriously.

"From the writings of Hitler during the 1930s and Mein Kampf to the polemics of bin Laden in the 1990s, there is ample evidence that sometimes when people write and say that they hate you and ... they want to destroy you, in fact they mean it and will try," he said.

His Republican colleague John McCain said economic sanctions should be imposed on Iran even if that meant bypassing the United Nations. He said military action must also remain an option if Tehran does not bow to international demands to halt its nuclear activities.

Rumsfeld described Iran's Islamic leaders as extremely dangerous and said they could not be permitted to acquire the world's deadliest weapons.

"The Iranian regime is today the world's leading state sponsor of terrorism," Rumsfeld said. "The world does not want, and must work together to prevent, a nuclear Iran."

But both he and Merkel were more measured than McCain, making clear that diplomacy was the best option.

"Diplomatic avenues need to be exhausted. We need to hold our nerve, go step by step," Merkel said.

Immediately after the vote in Vienna, a senior Iranian official announced Iran would immediately curb U.N. inspections of its nuclear plants and pursue full-scale uranium enrichment -- a step that could give it the ability to build the bomb.

U.S. and EU leaders, aware that Russia, China and developing states on the IAEA board want to avoid a showdown with Iran, the world's No. 4 oil exporter, have said that reporting Tehran to the Council will not end diplomacy or trigger early sanctions.

(Additional reporting by Mark John, Thomas Krumenacker, Michael Able, Sabine Siebold)