BAGHDAD, Feb 25 (Reuters) - Iraq said on Sunday the U.N. Security Council should focus on Israel's nuclear capabilities, reaffirming Baghdad's position that it had fulfilled U.N. demands to eliminate its weapons of mass destruction.

"They (U.N.) have acted against Iraq, which has fulfilled its obligation...but ignored Israel, the Zionist entity, which has all sorts of weapons of mass destruction, including nuclear weapons," Iraqi Deputy Prime Minister Tareq Aziz said.

Aziz refused to answer a reporter's question on German intelligence reports that Iraq may have nuclear weapons in three years and a missile capable of reaching Europe by 2005.

U.S. Secretary of State Colin Powell said in Israel earlier on Sunday that the reports underlined the need to contain Iraqi President Saddam Hussein, who has survived a crushing defeat in the 1991 Gulf War and 11 years of stringent U.N. sanctions for its invasion of Kuwait.

Powell has made seeking Arab support for the containment of Iraq the prime message of his Middle East tour which has taken him to Egypt and Israel. He will also visit Jordan, Syria, Kuwait and Saudi Arabia.

Aziz was speaking at Saddam International Airport after welcoming Armenian Foreign Minister Vardan Oskanyan, leading a 75-member delegation to open an Armenian embassy in Baghdad -- another sign of eroding sanctions.

"We in Armenia want to contribute in helping Iraq in its difficult situation," said the Armenian minister.

U.N. TALKS

Aziz said Iraqi Foreign Minister Mohammed Saeed al-Sahaf, who will meet U.N. Secretary-General Kofi Annan in New York on Monday, will renew Baghdad's demands for an immediate and total lifting of the sanctions.

Sahaf will also "stress the need to implement paragraph 14 of Security Council resolution 687 that calls for ridding the (Middle East) region of all weapons of mass destruction," Aziz said.

"The focus now should be on implementing this paragraph and any attempt to wriggle out of it is an aggressive move not only against Iraq, but all countries in the region which see Israel as their biggest threat," Aziz added.

Israel has consistently refused to confirm or deny Western reports that it has at least 200 nuclear warheads and the missiles capable of delivering them -- an apparent strategy to deter possible attacks against the Jewish state.

Aziz did not say if Baghdad would be willing to discuss Security Council resolution 1284, which calls for an easing of the sanctions regime if Baghdad allows U.N. weapons inspectors back and cooperates with them to oversee the elimination of Iraq's weapons of mass destruction.

Baghdad has rejected the resolution, which was adopted by the council in December 1999. The inspectors have been barred from Iraq since they left on the eve of a wave of U.S. and British bombings in December 1998.

Sahaf said before leaving Baghdad for his meeting with Annan on Monday and Tuesday that the talks would be held without any preconditions, "in particular resolution 1284."

07:06 02-25-01