Iran nuclear talks in Switzerland
Head of Iranian Atomic Energy Organisation Ali Akbar Salehi walks with others during a break in a meeting with world representatives seeking to pin down a nuclear deal with Iran at the Beau Rivage Palace Hotel in Lausanne Reuters

A UN attempt to work out a ban on nuclear weapons in the Middle East was on the brink of collapse after Egypt demanded the resignation of the Finnish co-ordinator of the initiative.

Western officials said Arab proposals drafted by Egypt for a major nuclear non-proliferation conference at United Nations headquarters in New York could torpedo the process and push Israel to walk away. Egypt had complained of lack of progress.

Israel neither confirms nor denies the widespread assumption that it controls the Middle East's only nuclear arsenal, and agreed to take part in NPT meetings on 11 May as an observer, ending a 20-year absence.

The head of Egypt's delegation, Assistant Foreign Minister Hashim Badr, rejected any suggestion that Cairo was a spoiler and insisted that he wanted to move the process forward, not kill it.

"Egypt has come to New York to secure a conference [on banning nuclear weapons in the Middle East], we want a conference," Badr said in an interview. "This is a key issue for Egypt for a long time, for decades, since 1974-75."

Failure to reach an agreement at the NPT conference could kill the Middle East nuclear ban initiative, diplomats said.

Egypt, in a proposal officially backed by all Arab countries and outlined in a "working paper" submitted by Arab delegations, called for Jaakko Laajava, the co-ordinator, to be dismissed. The 2010 NPT review meeting had called for a Middle East conference in 2012, but it never took place.

Benjamin Netanyahu
Benjamin Netanyahu thinks the deal with Iran is a huge mistake and demands that Tehran recognises Israel AFP/Getty

Despite the official backing of Arab delegations, several diplomats, including two Arabs, told Reuters that Saudi Arabia, Iraq and United Arab Emirates have reservations about Egypt's proposal. "Egypt wants to be in charge," a diplomat said.

Israel's delegation declined to comment on the proposal. The Jewish state has said it would consider inspections and controls under the NPT only if was at peace with its Arab neighbours and Iran.

Washington and Israel say it is Iran's nuclear programme - which Tehran claims is for peaceful purposes - that threatens the region.

The US has not given up hope. "We have seen significant progress in the regional consultations that have taken place," an official said.