Ahmadinejad made his comments to Iranian students
Iran's relations with its erstwhile partners in Europe seem to be hurtling downhill like a snowball out of control.
Ever since President Mahmoud Ahmadinejad was sworn into office in early August, week by week, the confrontation seems to escalate.
And now, the latest layer of ice to be added to the relationship; hostile remarks about Israel from the Iranian president, prompting widespread dismay.
It is, in fact, not uncommon for senior Iranian officials to take a rhetorical swipe at Israel.
And President Ahmadinejad was addressing a domestic audience of conservative Iranian students at a conference in Tehran ahead of the pro-Palestinian rally that always takes place on the last Friday of Ramadan.
But it did not take long for a chorus of European governments, plus Canada, the US and Australia - and of course Israel itself - to denounce the comments as deeply troubling and completely unacceptable, and summon Iranian ambassadors to give them a dressing down.
Britain called the address sickening. Israeli politicians have even called for Iran to be expelled from the United Nations.
So why this response?
In the first place, it is the vehemence of President Ahmadinejad's language that has caused such concern.
It is one thing for Iran to refuse to acknowledge the state of Israel's right to exist.
It is quite another to applaud the prospect of a new wave of Palestinian attacks that might "sweep Israel away", just as new diplomatic moves are afoot to try to nudge Israeli and Palestinian leaders back to direct talks and away from further violence.
"It's a crass thing for any head of state to say about another country," said one British diplomat.
Mr Blair questioned the suitability of Iran to have nuclear weapons
Privately other diplomats noted it was also spectacularly bad timing - the Iranian president's comments came within hours of a suicide bombing by Palestinian militants against Israeli civilians.
In the second place it reinforces Western concerns that Iran's policy is shifting.
Over the past eight years of President Khatami's more moderate style of government, his relations with European powers had improved significantly.
And for the Europeans it was highly significant when President Khatami signalled that if the Palestinians could find a way to co-exist with Israel, then Tehran would not interfere.
So a more conservative president who revived the Islamic revolutionary rhetoric of 20 years ago by echoing the late Ayatollah Khomeini's call for "Israel to be wiped off the map" was probably bound to cause consternation, and raise serious fears that Iran's policy and intentions towards Israel could be undergoing a sea change.
But there is also a third reason for such a co-ordinated expression of Western outrage: The controversy - still unresolved - over Iran's nuclear programme.
For several years the US, now joined by Europe, has raised fears that Iran's supposedly peaceful nuclear programme might be a front to try to develop secret nuclear weapons.
Iran says its nuclear programme is for purely peaceful purposes
Iran has always protested its innocence and insisted - unlike nations like Pakistan and India who built and tested nuclear weapons illicitly - that it has taken its international obligations over nuclear power seriously.
But in September, the United Nation's nuclear watchdog, the IAEA, declared Iran was in non compliance with the nuclear Non-Proliferation Treaty and gave Iran until its next meeting at the end of November to show it was prepared to co-operate more fully.
In theory, that could mean referring Iran, and the whole controversy, to the UN Security Council to consider a range of options, including economic sanctions.
In practice, though the US can now probably rely on EU backing for such a move, not all the countries represented on the IAEA board - or for that matter the UN Security Council - are quite so committed.
So belligerent comments by Iran's President that seem to threaten Israel are a perfect opportunity to reinforce the argument that Iran's word on its nuclear intentions perhaps should not be taken at face value.
It is a point that several Western leaders have made in the past few days and was summed up by Tony Blair at the end of the informal EU summit in Hampton Court.
"Can you imagine a state like that with an attitude like that having a nuclear weapon?" he asked rhetorically.
So will this row affect the next vote at the IAEA in November and increase Iran's diplomatic isolation?
The reaction of more ambivalent countries has been interesting.
The Indian government, which has been assiduously courted by Tehran in the last few days, declined to comment on the issue.
But Russia, another key player, after initial hesitation, followed Europe's lead and summoned Iran's ambassador to Moscow for a reprimand.
Russia's urbane Foreign Minister Sergei Lavrov even ruefully noted that such inflammatory comments would surely boost the arguments of those - like Britain and the US - who want Iran's controversial nuclear programme to be taken up by the UN Security Council.
Even so, Moscow has its own economic and strategic reasons for wanting to keep relations with Tehran on an even keel.
Both Russia and China - heavily reliant on Iranian energy - would probably block any Security Council vote against Iran.
In which case, what diplomatic tools are left for the Americans and Europeans? Rhetorical pressure, of course, whenever Iran says or does anything that looks unreasonable.