DAMASCUS – French President Nicolas Sarkozy warned Iran on Thursday it was taking a dangerous gamble in seeking to develop nuclear weapons because one day its arch-foe Israel could strike.

Western powers accuse Iran of seeking the atom bomb under the cover of a civilian nuclear programme but Tehran denies the charge, insisting it only wants to master atomic technology in order to generate electricity.

The United States and Israel have not ruled out military action if the dispute cannot be settled through diplomacy.

'Iran is taking a major risk in continuing the process to obtain a military nuclear capacity,' Sarkozy told a meeting in Damascus with the leaders of Syria, Turkey and Qatar.

'One day, whatever the Israeli government, we could find one morning that Israel has struck,' Sarkozy added.

'The question is not whether it would be legitimate, whether it would be intelligent. What will we do at that moment? It would be a catastrophe. We must avoid that catastrophe,' Sarkozy told the meeting in comments broadcast on television.

Speculation about a possible attack on Iran's nuclear facilities has risen since Israel staged an air force exercise in June which was reported to be a simulation of a strike against Iran.

'WEST FRIGHTENED'

The French president has asked Syrian President Bashar al-Assad to help resolve the standoff with Iran, a close ally of Syria, and Assad has pledged to help seek a solution.

'The solution is to find a mechanism to prove that this nuclear programme is a peaceful programme,' Assad told France 2 television in an interview, adding that he understood why the West was worried about the idea of Iran getting the bomb.

'Of course the West is frightened. We don't want the nuclear bomb in the Middle East,' he said.

The U.N. Security Council has imposed three rounds of sanctions against Iran over its failure to heed calls to suspend uranium enrichment, a process that can produce fuel for power plants or, potentially, nuclear weapons.

Sarkozy repeated his call on Iran to halt enrichment and said Tehran should accept stricter inspections by the U.N. nuclear watchdog, the International Atomic Energy Agency (IAEA).

'If Iran continues enrichment, that is a problem. But IAEA checks should at least take place in a complete manner. Then (Iran's) good faith would be established,' he said.

Iran is in talks with the IAEA on improving its cooperation with the agency, but Sarkozy did not say what 'complete' inspections would be in his view.

Tehran has also so far failed to respond to a sweetened offer of incentives by France, Britain, Germany, the United States, Russia and China aimed at persuading it, initially, to freeze expansion of its nuclear work.

(Additional reporting by Crispian Balmer)

(Editing by Mark Trevelyan)