French President Nicolas Sarkozy on Monday told Israel’s parliament that a nuclear-armed Iran is “unacceptable” to his country.But the French leader also had some tough words for Israel, urging it to halt settlement activity in the West Bank and saying that Israel and the Palestinians will have to share Jerusalem under a final peace deal. Israel has repeatedly warned that it believes Iran is pursuing nuclear weapons.In Monday’s address, Sarkozy said Israel is not alone. He said the entire European Union is concerned about Iran’s nuclear programme. “If Iran develops nuclear weapons, it’s unacceptable to our country,” he said.He did not say how Iran would respond. Sarkozy has previously urged a diplomatic solution with Iran that would prevent what he calls the “catastrophe” of either an Iranian bomb or a foreign attack on Iran.Last week, US defence officials said a large Israeli military exercise may have been aimed at showing the country’s abilities to attack Iranian nuclear facilities. Israel confirmed the drill took place, but refused to say whether the maneuvers were for a strike in Iran. On Monday, the EU was expected to announce sanctions against Iran’s biggest bank. The move is aimed at stepping up international pressure on Tehran to bring its nuclear program in line with international demands. Sarkozy received a warm welcome and his speech was repeatedly interrupted by applause. Sarkozy said Israel must halt its West Bank settlement activity—a key Palestinian demand backed by the international community.And he said “there can be no peace without recognising Jerusalem as the capital of two states, with guarantees of free access to the holy places of all the religions”.