German Chancellor Angela Merkel's spokesman on Wednesday, Aug 6, urged companies to exercise restraint and employ moral sense before doing business in Iran after Israel criticized Berlin for allowing a German firm to build three gas plants in Iran.

"We warn companies of the extremely sensitive nature" of economic ties with Iran, Thomas Steg told a government news conference, adding that Berlin also expected firms to employ their "moral sense" if they invest there.

"The government is expecting some sensitivity from businesses," he added.

Steg said the company's plans to export three liquefied natural gas plants to Iran were approved earlier this year because the deal did not violate international sanctions against Tehran over its nuclear program or fall under

German regulations requiring a government review. Berlin thus did not have to give its authorization, he added.

Strong trade links between Germany, Iran

The West accuses Iran of enriching uranium to covertly develop nuclear weapons. Iran, the world's fourth largest oil producer, denies the charge and says it is developing a civilian nuclear program to help meet its energy needs.

Germany is one of six nations leading diplomatic efforts to push Iran to abandon its nuclear work.

Germany has scaled back business ties with Iran, and German banks have largely ceased doing business with the Islamic republic over its nuclear program.

Germany is one of Iran's biggest trade partners. Its exports to Iran totalled 3.6 billion euros last year.

Israel worried by gas deal

The Israeli government last week expressed concern over the 100-million-euro ($155 million) deal between Germany's Steiner group and Tehran to build three liquefied natural gas plants in Iran.

"The ministry will talk to the highest officials within the German government to obtain clarification and express its concern over the fact that the German office of export controls gave its green light to the contract," Israeli Foreign Ministry spokesman Arye Mekel told the AFP news agency.

Israel, the region's sole if undeclared nuclear armed power, considers Iran its greatest threat.

"The fact that Germany, a member of the European group EU3, which includes France, Britain and Germany, is adopting a position that harms international efforts to considerably toughen sanctions against Iran over its continued nuclear program, is worrying," the ministry said in a statement.