Olmert told reporters accompanying him on a rare trip to Japan that Iran was putting substantial energy into developing a "non-conventional" capacity.

"It is still possible to stop them. It's not too late. There is still time. But it is not unlimited. It's a matter of no more than a few months," he said.

Western powers are currently stepping up efforts to impose a third set of UN Security Council sanctions over Iran's nuclear programme, to punish its refusal to suspend uranium enrichment, a potential weapons-making process.

Iran insists its nuclear programme is peaceful and aimed only at generating atomic energy.

Olmert, the first Israeli premier to visit Tokyo in 11 years, has met with Prime Minister Yasuo Fukuda and Emperor Akihito on a trip primarily aimed at boosting tepid trade ties.

He signed a deal pledging to work to boost commerce between the two countries, including through cooperation in science and technology.

According to Olmert, the latest report from the International Atomic Energy Agency on Iran's nuclear activities released Friday had, in Israel's eyes, played down the seriousness of the problem.

"International efforts must be stepped up," he said.

"I hope that soon, in the coming days, the UN Security Council will adopt a third course of sanctions against Iran and that certain states will adopt their own sanctions in order to limit the activities of this country" in the nuclear arena, he said.

Top officials of the council's five permanent members -- the United States, Britain, France, China and Russia -- plus Germany on Wednesday discussed the IAEA report in Washington and the next steps at the UN panel.

The UN atomic watchdog said it could still not confirm if the Iranian atomic drive was peaceful, prompting the United States and its European allies to push for new sanctions.

Olmert said Iran and the issue of nuclear proliferation had an "important" role in his discussions with Japan's leaders.

"We are in agreement on the need to act on the Iranian front and on that of North Korea. The position of Japan is clear on this point," he said.

The Asian economic giant, which has virtually no natural energy resources, has long maintained close commercial and political ties with Arab nations and Iran, which counts on Japan as the top customer for its oil.

But Japan, the only nation to have suffered atomic attack, has taken an increasingly critical stance on Iran's nuclear drive. In 2006, Japan pulled out of a project to develop Iran's largest online oilfield.

"I thanked the prime minister for his support for the negotiations between Israel and the Palestinians," Olmert said after talks with his counterpart Yasuo Fukuda.

"I also express my appreciation for Japan's firm stance against Iran's pursuit of nuclear weapons and its contribution to the global campaign against nuclear proliferation," he told a joint press appearance.

Japan has been seeking a greater role in the Middle East in line with its aspirations for more global influence. The country is funding a project to build an agro-industrial park in the West Bank in a bid to create jobs in the ailing Palestinian economy.

"Japan will give the utmost support to achieve peace in the Middle East," Fukuda told reporters.

A joint statement said the two countries "reaffirmed that the solution of the Arab-Israel conflict will contribute to achieving stability and prosperity in the Middle East."

Olmert was expected to have spoken with Fukuda about the joint dangers of Iran and North Korea, the arch-enemies of Israel and Japan, respectively.

A Japanese newspaper had said Tuesday that Olmert would share intelligence photos purporting to show military cooperation between the Islamic republic and communist state.

Olmert said on Thursday morning he would meet US Secretary of State Condoleezza Rice, who is currently on a three-nation regional tour. He will be back in Israel on Friday.

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