"We must recognize the strategic challenge the government of Iran poses," Blair added. "Not its people, possibly not all its ruling elements, but those presently in charge of its policy."

Blair's language differed slightly from excerpts of the speech released in advance by Blair's office, which called Iran a "strategic threat."

Iranian Foreign Ministry spokesman Mohammad Ali Hosseini called Blair's speech "hostile" and "obvious intervention" in the region's affairs.

"The negative and discordant tendencies of Britain, along with the warmongering and unilateral policies of (President) Bush and Blair, have been the reason for tension and extremism and the cause of public hatred in the region," Hosseini told the state news agency IRNA.

Each stop on the tour played a role in Blair's vision of an "arc of moderation" that could work to solve the Israeli-Palestinian conflict and defuse the anger that helps fuel international terrorism. He backed Turkey's bid to join the European Union, praised Egypt's role in mediating between Israel and the Palestinians, and urged support for the fragile Iraqi government of Prime Minister Nouri al-Maliki.

On Tuesday, he praised the oil-rich United Arab Emirates and its booming commercial hub, Dubai, as a model of economic openness that could set an example for the wider Arab world - even claiming the UAE's model "is what Basra or Gaza could be, were there people not so savagely let down by the politics of their countries."

He said the fate of the Middle East, "for good or ill," would be felt around the world.

While Blair's rhetoric was strong, the concrete achievements of the trip have been few.

Blair called for an "early meeting" between Palestinian President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert, the relaunch of the peace process and support to bolster Abbas' authority in his struggle with the Islamic militant group Hamas. But he announced no new commitments or agreements on that front.

Blair, who has said he will step down by mid-2007, is on one of the last big foreign tours of his 10-year premiership, seeking to cement a foreign-policy legacy that goes beyond his role as the chief US ally in Iraq.

A report released Tuesday by the influential Chatham House think-tank concluded that Blair's foreign policy ambitions have stalled because he is unable to exert real influence on the White House, despite offering the United States almost a decade of unflinching support.

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