TEL AVIV, Jan 24: The chief of Israel's Mossad intelligence agency said on Monday arch-foe Iran was on the brink of enriching uranium, a process key to building a nuclear bomb.

"The assessment is that by the end of 2005 the Iranians will reach the point of no-return from the technological perspective of creating a uranium-enrichment capability," Mossad head Meir Dagan told parliament's Foreign Affairs and Defence Committee.

Iran, which says its nuclear programme is for energy needs only, agreed in November to suspend uranium enrichment under a European Union-brokered deal. Israel and the United States suspect Iran of buying time while it covertly seeks the bomb.

"The Iranians are striving to secure from the Europeans an agreement that would allow them to continue enriching uranium, even on an intensified level, under supervision and with guarantees," Dagan said.

"The moment that you have the technology for enrichment, you are home free," he said, adding that from that point it would take Iran around two years to manufacture nuclear weapons.

Believed to be the Middle East's only nuclear power, Israel has hinted it could hit Iran militarily to stop it getting the bomb. An Israeli air strike on the Iraqi reactor at Osiraq in 1981 dealt a severe blow to Saddam Hussein's nuclear programme.

Iran - and any Israeli pre-emption - are core concerns for US President George W. Bush in his second term in office. "If, in fact, the Israelis become convinced the Iranians had significant nuclear capability, given the fact that Iran has a stated policy that their objective is the destruction of Israel, the Israelis might well decide to act first, and let the rest of the world worry about cleaning up the diplomatic mess afterwards," US Vice President Dick Cheney said last week.

But Israeli Vice Premier Shimon Peres sounded a note of caution, saying the Jewish state should defer to its US ally. -Reuters