The Simon Wiesenthal Centre on Wednesday urged Chancellor Angela Merkel to block a major gas deal between a German company and Iran, saying it would "embolden" an anti-Semitic regime.

The Jewish human rights group said Merkel should intervene to stop a 100-million-euro (156-million-dollar) deal between Germany's Steiner and the Iranian government to build three gas liquefaction facilities.

It said the German government's export control office had given the green light for the project, which would create a site in southern Iran that would produce 10,000 barrels of liquefied natural gas per day.

"It is an outrage that bureaucrats would be allowed to concoct a deal that thwarts the stated policies of the government of Germany," Rabbi Abraham Cooper, associate dean of the Vienna-based Centre, said in a letter dated July 29.

"This deal...helps Iran in this sensitive sector and makes a mockery of the international community's efforts to isolate a nuclearising Iranian regime."

The economy ministry was not immediately available for comment.

Cooper said the deal would negate Merkel's address to the Knesset in March in which she said that threatening Israel's right to exist was akin to threatening Germany's.

"Unless the chancellor overrules the export control office's decision, Germany will strengthen Tehran and further embolden a regime whose president repeatedly calls for the destruction of the Jewish state," he said.

Israel, the United States and Western allies suspect that Iran's nuclear drive is aimed at developing an atomic bomb, a claim vehemently denied by Tehran, which says its programme is designed solely for civilian use.

The German government has reduced export guarantees with Iran and German banks have largely ceased doing business with the Islamic republic over the dispute about Tehran's nuclear programme.