British Prime Minister Tony Blair

European Union leaders meeting at a summit outside London have sharply condemned Iranian President Mahmoud Ahmadinejad after he called for the obliteration of Israel.

British Prime Minister Tony Blair, the host of Thursday's E.U. summit, said he finds the Iranian's comments repugnant.

"There sentiments are completely and totally unacceptable," said Mr. Blair.  "I have never come across such a situation of the president of a country saying they want to wipe out another country."

Mr. Blair says the statement raises new concerns about Iran's controversial nuclear program.

"If they carry on like this the question people are going to be asking is, when are you going to do something about this, because you imagine a state like that, with an attitude like that, having a nuclear weapon," he added.

Mr. Blair, whose government holds the rotating E.U. presidency, spoke at the end of a one-day summit on how Europe should respond to the challenges of economic globalization.

He said the issues on the table are of concern to all Europeans.

"Jobs, living standards, terrorism, crime, immigration, how we stand up in the world and make our weight count," Mr. Blair noted.

European Commission President Jose Manuel Barroso says there was consensus on the need for change to compete with the economies of United States, China and India.

"We have to modernize," said Mr. Barroso.  "We have to reform.  We have to face up to those challenges of globalization and I think this was a great conclusion from this summit.  We are building a new consensus in Europe to make Europe move forward."

Among the topics discussed is the possibility of setting up a multi-billion-dollar fund to help retrain European workers who lose their jobs to global competition.