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By Fredrik Dahl
VIENNA (Reuters) - Arab diplomats signaled on Tuesday they would seek to step up pressure on Israel over its assumed nuclear arsenal but the Jewish state said any attempt to "bash" it would be counterproductive.
Arab countries, angry at the lack of movement in efforts to move towards a Middle East free of nuclear weapons, have served notice they plan to target Israel for criticism at the U.N. atomic agency's annual member state gathering in September.
"We need to raise our frustration, we need to raise our concern about this issue," one Arab envoy in Vienna, where the International Atomic Energy Agency (IAEA) is based, said.
Israel's ambassador to the IAEA, Ehud Azoulay, told Reuters that Arab states "are taking a counterproductive route by raising this issue ... and trying to bash Israel".
In a letter to IAEA Director General Yukiya Amano, posted on the U.N. agency's web site, 18 Arab member states asked for "Israeli nuclear capabilities" to be included as an agenda item of the September 16-20 gathering in the Austrian capital.
The IAEA meeting "must take appropriate measures to ensure that Israel places all its nuclear installations under agency safeguards and accedes to the Treaty on the Non-Proliferation of Nuclear Weapons," the letter, dated in June, said.
Arab countries are considering putting forward a non-binding but symbolically important resolution on the issue after refraining from doing so at the previous two annual gatherings of the IAEA's 159 member countries, Arab diplomats said.
Such a move would likely draw a rebuke from the United States and its Western allies, which argue that singling out Israel for blame could undermine broader steps aimed at banning weapons of mass destruction in the volatile region.
Israel is widely believed to possess the Middle East's only nuclear arsenal, drawing Arab and Iranian condemnation. It is the only regional country outside the global Non-Proliferation Treaty (NPT) to prevent the spread of atomic arms.
Israel and the United States regard Iran as the world's main proliferation threat, accusing Tehran of covertly seeking a nuclear arms capability, something the Islamic state denies.
An Egyptian plan for an international meeting to lay the groundwork for creating a Middle East free of weapons of mass destruction was agreed at an NPT review conference in 2010.
But the United States said late last year that the conference would not occur as planned in December 2012 and did not make clear when, or whether, it would take place. The United States, Britain and Russia are co-sponsors of the meeting.
"We are disappointed but we are still eager to convene the conference," the Arab envoy said.
U.S. and Israeli officials have said a nuclear arms-free zone in the Middle East could not be a reality until there was broad Arab-Israeli peace and Iran curbed its nuclear program.
Israel's Azoulay said "the atmosphere in the Middle East" was not conducive to such a conference now. "You see what is happening in Syria, in Libya, in Iran, now in Egypt as well," he said, alluding to instability and bloodshed around the region.
(Editing by Mark Heinrich)