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REUTERS/Brendan McDermid

Israel's Defence Minister Ehud Barak speaks to the press after his meeting with United Nations Secretary General Ban Ki-moon at the United Nations Headquarters in New York July 30, 2008.

WASHINGTON (Reuters) - Israel voiced displeasure on Thursday at recent U.S. engagement with Iran and urged the Bush administration to stand firm on demanding Tehran abandon nuclear projects with bomb-making potential, an Israeli official said.

In a shift of policy, U.S. diplomat William Burns joined envoys from other world powers for a July 19 meeting with an Iranian delegate at which his country was given two weeks to answer calls to curb uranium enrichment or face more sanctions.

The turnaround raised eyebrows in Israel, which has long looked to its U.S. ally to lead efforts to isolate Iran.

Since the multi-party talks in Geneva, Iran has said it would press ahead with its nuclear plans. Israel has increased the stakes in the diplomatic standoff by hinting it could resort to military strikes against its arch-foe's nuclear sites.

One of the more vocal Israeli hawks, Deputy Prime Minister Shaul Mofaz, was hosted by Burns on Thursday for routine bilateral consultations known as the "strategic dialogue."

Mofaz's spokeswoman, Talia Somech, said he used the forum, as well as separate meetings with U.S. Vice President Dick Cheney and Secretary of State Condoleezza Rice, to raise Israel's objections to the direct U.S.-Iranian talks.

"It wasn't a matter of leveling outrage, but of voicing Israel's strong concerns," she said.

"He (Mofaz) urged the Americans to set firm conditions, such as a refusal to allow the Iranians to enrich uranium on their turf, and to be clear that the deadline must be preserved. The Iranians are simply looking for cracks to exploit."

The West accuses Iran of seeking to develop nuclear weapons under cover of a civilian program. Iran denies it, and has stirred regional war jitters by vowing to retaliate for any attack by targeting Israel and U.S. assets in the Gulf.

The State Department issued a statement after the Mofaz-Burns meeting that said nothing about the possibility of using force against Iran.

"The United States and Israel share deep concern about Iran's nuclear program, and the two delegations discussed steps to strengthen diplomatic efforts and financial measures to prevent Iran from developing a nuclear weapons capability," the statement said.

It gave no details of the measures discussed.

"We also reaffirmed our strong mutual determination to counter Iran's support for terrorism," said the statement, which the State Department said was being issued by both the United States and Israel.

Israel, which is believed to have the Middle East's only atomic arsenal, says a nuclear-armed Iran could threaten its existence.

Mofaz, a former defense minister, is considered a possible successor to Israeli Prime Minister Ehud Olmert, who plans to quit after his party chooses a new leader in September.

Elaborating on a now standard Israeli call, Mofaz said during his Washington talks that "all options against Iran should not only be on table, but prepared," Somech said.