BRUSSELS: Israeli President Shimon Peres on Thursday urged the EU to brand Hezbollah a terrorist group, as failing to do so would only encourage it to expand its operations.

Peres said Hezbollah, which the EU has so far declined to put on a list of international terrorist groups, was now intervening directly in Syria against rebels opposed to President Bashar al-Assad and so was spreading its reach.

"If you do not take measures against Hezbollah, then they may think that they are permitted" to do what they like, he said after a meeting with European Commission head Jose Manuel Barroso.

"I know this is not the EU's intention," he said, in reply to a question about Europe's stand.

Peres said he hoped that Hezbollah "is called to order ... It should be stopped, it is terror ... it does not have any other name."

Barroso said that designating Lebanon's Hezbollah as a terrorist group required careful assessment and was first and foremost a decision for member states.

"We are extremely concerned," Barroso said, highlighting an attack last year on Israeli tourists in Bulgaria which Sofia has blamed on Hezbollah.

The issue is sensitive given sharp differences between EU members -- Britain is in favour of blacklisting Hezbollah but France and Italy believed reluctant -- and US pressure for change.

US Secretary of State John Kerry has urged the bloc to follow Washington's lead on Hezbollah so as to help crack down on its fund-raising activities.

Hezbollah has been on a US terror blacklist since 1995 after a series of anti-American attacks, including the bombing of the US embassy and Marine barracks in Beirut in the 1980s.

Peres and Barroso were also asked about Iran, a key backer for Hezbollah, and whether sanctions were doing enough to rein in a nuclear programme which Israel and the West fears is aimed at producing atomic bombs.

The Israeli president said "my own impression is that the sanctions did more than was expected" but were still not enough and all options had to be left on the table -- US President Barack Obama's position.

"We have to continue" the sanctions, Peres said, adding that the problem in Iran was not just its nuclear ambitions but its violation of human rights and backing for international terrorism.

"All this should be stopped," preferably by economic and political means, he added.

Barroso stressed the EU's key role as the lead partner for the '5+1' Group -- the United States, Britain, China, France, Russia and Germany -- in talks with Iran.

"We are indeed making a very great effort on this difficult issue," he said.

Recent EU-led talks with Iran were said to have been more positive, with another round set for next month, but earlier this week the '5+1' powers said they were "deeply concerned" at Tehran's latest upgrades of its nuclear facilities.