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Israel and the United States are in discussion on setting a "red line" for Iran's nuclear programme, Prime Minister Benjamin Netanyahu said.

"We're discussing it right now with the United States," Netanyahu said in an interview with Canada's CBC television aired late on Sunday.

In the interview, two days after Canada suspended diplomatic relations with Tehran over its nuclear project, Netanyahu again signalled that a clear boundary - which he has yet to define publicly - could obviate the need for military action.

sraeli newspaper Haaretz said on Monday Netanyahu had told German Foreign Minister Guido Westerwelle that if Iran enriched uranium above 20 percent, that would provide a red line as it would prove Tehran had chosen to exceed the level of refinement suitable for civilian energy and "break out" with an atom bomb.

Netanyahu, who met Westerwelle on Sunday in Jerusalem, is scheduled to travel to the New York and address the U.N. General assembly about Iran later this month.