LONDON, Nov14: Prime Minister Tony Blair on Monday night emphasised that wider peace in the Middle East, including Iraq, was directly linked to a solution to the Israeli-Palestinian conflict.

Making his annual foreign policy speech, the text of which was put on the website of 10 Downing Street, the British prime minister indicated that the rout of the Republicans in the US mid-term elections was likely also to impact on UK’s foreign policy particularly in the Middle East.

As the situation was evolving, so our strategy should evolve to meet it, he said.

He was very harsh on Iran and made it sound as if he considered Iran to be behind all the terrorism that was taking place in the Middle East. But indicated that if it gave up its nuclear ambitions, a middle road could be found to engage Tehran in the interest of wider Middle East peace.

He repeatedly condemned Iran's posture, saying "they are using pressure points in the region to thwart us. So they help the most extreme elements of Hamas in Palestine, Hizbullah in the Lebanon, Shia militia in Iraq".

The prime minister urged Tehran to "stop supporting terrorism" in the region or face isolation.

However, he also indicated that a pullout if not a withdrawal was on the cards. He said inside Iraq we should empower the Iraqi leadership that wanted to take responsibility - that knows that they, not us, must lead and win the fight against terrorism. To do this, effectively, they need our support, politically, in their economy and for their armed forces.

First, we need a strong political compact in Iraq led by the Iraqi government to bring all parties together, with clear commitments to non-sectarian government and to democracy;

Second, we need to build Iraqi governing capability, especially in the disbursement of money for reconstruction and rebuilding of the economy;

Third, we must plug any gaps in training, equipment and command and control in the Iraqi Army and help the new Interior Minister root out sectarianism in the police, which in turn will allow us, within the timeframe set down by General Casey, to transition to Iraqi control.

He said just as it is, in significant part, forces outside Iraq that are trying to create mayhem inside Iraq, so we have to have a strategy that pins them back, not only in Iraq but outside it too.