Iran has executed an Iranian businessman convicted of spying on the military for the Islamic Republic''s arch foe Israel, the judiciary said on Saturday.

Ali Ashtari was hanged on Monday. He was arrested in 2006 after working with Israel''s foreign intelligence agency Mossad for three years, a judiciary statement said.

State television broadcast what it said was a confession.

Tensions have run high in recent months between Iran and Israel, which has not ruled out military strikes on the Islamic Republic if diplomatic efforts fail to resolve a row over Tehran''s nuclear programme.

Israel, believed to be the only country in the Middle East with nuclear weapons, sides with the West in accusing Iran of seeking to build atomic weapons of its own. Iran denies this, saying it wants to use nuclear power to generate electricity.

"Ali Ashtari, an Iranian who spied for the Zionist regime of Israel, was hanged on Monday morning," the statement obtained by Reuters said. It said he had been detained at the end of 2006.

He was sentenced to death in June. Iranian media had said at the time that Ashtari was a 43-year-old manager of a company selling communications and security equipment to the Iranian government.

An Israeli government official said in June that Israel had no knowledge of the case. Israel''s Foreign Ministry was not immediately available for comment on the case on Saturday.