The West should press Iran to help stem bloodshed in neighboring Iraq and build stability across the Middle East, British Prime Minister Tony Blair said Monday, outlining his hopes for a future peace process in the region.

Blair also rebuked critics who argue Britain's close relationship with the United States has been damaging and defended close involvement with the European Union, according to a text of his speech prepared for delivery.

"It would be insane — yes, I would put it as strongly as that — for us to give up either relationship," according to his speech. "Anti-Americanism or Euro-skepticism are not merely foolish, they are the surest route to the destruction of our true national interest."

Britain has sent more troops to Iraq than any nation besides the United States, and rising violence there — and a British death toll that reached 125 on Sunday — have heightened calls for a course change.

Because much of the militancy in Iraq comes from outside its borders, Blair said a "whole Middle East strategy" was needed to counter it.

Resolving the Israeli-Palestinian conflict must be the core of such an approach, he argued, followed by efforts to stabilize Lebanon and unite moderate Arabs and Muslims behind a push for peace in those countries and in Iraq, Blair's speech said.

"A major part of the answer to Iraq lies not in Iraq itself but outside it, in the whole of the region where the same forces are at work, where the roots of this global terrorism are to be found, where the extremism flourishes," he said.

Blair accused Tehran of aiding Shiite militias in Iraq, Hezbollah in Lebanon and the most extreme elements of Hamas in the Palestinian territories.

"They put obstacles in the path to peace, paint us ... as the aggressors, inflame the Arab street and create political turmoil in our democratic politics," his text said.

The West must reiterate demands that Iran cease its support for extremists and suspend its uranium enrichment program. "Or alternatively they face the consequences of not doing so — isolation," he said.

Blair's address, to be delivered a day before he speaks by video-link to America's Iraq Study Group — a bipartisan Washington commission attempting to set a new course for the Iraq war— is aimed at promoting dialogue with both Iran and Syria, his office said.

The prime minister's spokesman rejected the possibility that either country could be rewarded for cooperation in the Middle East peace process, ruling out any negotiations with Iran over its contentious nuclear program in return for support over Iraq.

President Bush's chief of staff, Josh Bolten, said Sunday the White House would consider opening talks with Syria and Iran if the study group headed by former Secretary of State James A Baker III and former Democratic Rep. Lee Hamilton recommended it.

Blair said international forces must "plug any gaps" in training, equipment and command and control in the Iraqi army, as well as helping Baghdad's interior minister root out sectarianism in the police force. The prime minister has repeatedly said that British troops will remain in Iraq until Iraqi forces can take responsibility for security.