JERUSALEM (AFP) - Israel's outgoing Prime Minister Ehud Olmert shot a thinly-veiled warning at Iran on Thursday after its arch-enemy announced the completion of its first nuclear power plant. "We are a strong country, a very strong country, and we have at our disposal (military) capacities the intensity of which are difficult to imagine," Olmert told public radio. "We have deployed enormous efforts to reinforce our deterrence capacity," he said. "Israel will be able to defend itself in all situations, against all threats, against all enemies. I cannot say more but believe me, I know what I'm talking about." Although the remarks did not mention Iran by name they were clearly aimed at the Islamic republic which Israel considers its enemy number one. Olmert's remarks came a day after Defence Minister Ehud Barak said the continuation of Iran's nuclear programme "is a potential danger for the existence of the state of Israel. "Our position is clear. Sanctions are necessary but Israel does not rule out any option and suggests other countries do the same," Barak said. Benjamin Netanyahu, the hawk tasked with forming Israel's next government after the February 10 election, said Iran was the top challenge facing the country. "Iran is seeking to arm itself with nuclear weapons and is the most serious threat to our existence since the war of independence" in 1948, he said. Meanwhile, European powers are considering imposing new sanctions on individuals and institutions linked to Iran's nuclear programme, diplomats in several capitals said Thursday. According to a report in The Financial Times, Britain, France and Germany have drawn up a list of 34 Iranian entities and 10 people they would like to see punished for helping in Tehran's enrichment of nuclear fuel. Officials who spoke to AFP played down the report, insisting that the list had not been finalised, but confirmed talks were ongoing. "It's a preparatory draft," said one. "It's not a final list," added another. Again according to The Financial Times, EU members Greece, Cyprus, Spain, Austria and Sweden are opposed to Europe taking new measures against Tehran, perhaps explaining why diplomats were reluctant to talk publicly. "I can't confirm this list," French Foreign Minister Bernard Kouchner told reporters when asked about The FT article. "Specific European sanctions have been suggested, and worked on a little," he confirmed, adding however: "No decision has been made on sanctions under the auspices of the EU." The list cited in the Financial Times report includes names already under UN and US sanctions, but also adds new Iranian targets for a possible round of European measures. These include the Sharif University of Technology, Iran Air Cargo, the Iran Insurance Company, Bank Tejarat, the economic arm of the Revolutionary Guards and the Razi Institute for Serum and Vaccine. In Paris, Brussels and Berlin, diplomats said they believed the threat of new European sanctions could strengthen the hand of US President Barack Obama as he attempts to engage Iran in a dialogue on the issue. An official in the office of EU foreign policy chief Javier Solana said any new openness in White House policy would need to be backed up by "a firmer hand on the sanctions side." But he cautioned: "It's still too soon to say whether the Americans will also come to this conclusion."