Netanyahu made the request during talks with Italian Foreign Minister Giulio Terzi on the disputed nuclear programme, Hezbollah leading regional ally.

"We are facing great challenges; perhaps the greatest challenge that the international community is facing is Iran's quest for nuclear weapons," the prime minister said, according to a statement issued by his office.

"I think that the international community must set a clear red line for Iran that it knows that it cannot go beyond in its pursuit of nuclear weapons, and I think that as hard as it is, the economic sanctions have to be intensified.

"We appreciate the efforts that you have made and that others in Europe are making. There is one other effort that I think Europe could make to advance the cause of security and peace, and that is to declare Iran's proxy, Hezbollah, a terrorist organisation," he said.

"It is exactly that. It's the world's leading terror organisation, and Europe could contribute much by declaring it for what it is."

In July, the European Union turned down a request by Israeli Foreign Minister Avigdor Lieberman to blacklist Hezbollah as a terror group after a deadly bombing in Bulgaria.

"There is no consensus for putting Hezbollah on the list of terrorist organisations," said Cypriot Foreign Minister Erato Kozakou-Marcoullis, whose country currently holds the rotating EU presidency.

Kozakou-Marcoullis said Hezbollah was an organisation comprising a party as well as an armed wing and was "active in Lebanese politics" -- with representatives in the government and in parliament.

Israel blames Iran and Hezbollah for the July 18 suicide attack at the Black Sea airport of Burgas in which five Israelis and their Bulgarian driver died.

It also says that Iran and Hezbollah plotted to carry out more than 20 attacks against Israeli and Jewish targets over the past two years.

Iran and Hezbollah have denied the accusations.

Israel and much of the West believes Iran's nuclear activities mask a weapons programme, a charge Tehran denies.

Israel says a nuclear Iran would pose an existential threat to the Jewish state and has consistently warned it that all options remain on the table, including a military strike on Tehran's nuclear installations.

On Wednesday the Israeli prime minister again urged the international community to "draw a clear, red line on Iran" and reinforce economic sanctions against Tehran over its nuclear programme.