US presidential hopeful Barack Obama said on Wednesday that a nuclear Iran would pose a "grave threat" and that the world must prevent it from obtaining the atomic bomb.

"A nuclear Iran would pose a grave threat and the world must prevent Iran from obtaining a nuclear weapon," Obama said.

"I will take no options off the table in dealing with this potential Iranian threat," Obama said on the latest leg of talks in Israel and the Palestinian territories.

"A nuclear Iran would be a game-changing situation, not just in the Middle East but around the world."

Obama spoke of a series of "big sticks and big carrots" regarding the Iranian regime and repeated his openness to meeting with its representatives, if the conditions were appropriate.

"I would at my time and choosing be willing to meet with any leader if I thought it would promote the national security interest of the United States of America," he said.

"I think there are opportunities for us to mobilise a much more serious regime of sanctions on Iran but also to offer them the possibility of improved relations to the international community," he said in identifying the alternatives.

Obama was speaking in the southern Israeli town of Sderot, which has long been a target of rocket and mortar fire from Palestinians in the neighbouring Gaza Strip.