Iran's conservative president has said that Israel should be moved to Europe.
Iran's president has already called for Israel to be wiped off the map
"If European countries claim that they have killed Jews in World War II... why don't they provide the Zionist regime with a piece of Europe," Mahmoud Ahmadinejad told Iranian television.
"Germany and Austria can provide the... regime with two or three provinces for this regime to establish itself, and the issue will be resolved."
The president's remarks were quickly condemned by Israel and the US.
"This is not the first time, unfortunately, that the Iranian president has expressed the most outrageous ideas concerning Jews and Israel," Israeli foreign ministry spokesman Mark Regev said.
"He is not just Israel's problem. He is a worry for the entire international community," he added.
Austrian Chancellor Wolfgang Schuessel, quoted by AFP agency, described the remarks as "an outrageous gaffe, which I want to repudiate in the sharpest manner".
White House spokesman Scott McClellan said the Iranian leader's comments "further underscore our concerns about the regime".
"And it's all the more reason why it's so important that the regime not have the ability to develop nuclear weapons," he said.
UK Foreign Secretary Jack Straw said: "I condemn [the comments] unreservedly. They have no place in civilised political debate."
Mr Ahmadinejad's stance was also condemned by French President Jacques Chirac and German Chancellor Angela Merkel, who were meeting in Berlin.
In October, Mr Ahmadinejad caused an outcry by calling for Israel to "be wiped off the map".
His latest comments come as Iran is mired in controversy over its nuclear programme, which it says is solely for the provision of fuel, but which the US says is aimed at producing nuclear weapons.
An International Atomic Energy Agency (IAEA) report in September said questions about Iran's nuclear programme remained unanswered despite an intensive investigation.