Ahmadinejad's remarks echo other recent statements
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International condemnation has greeted comments by Iranian President Mahmoud Ahmadinejad that the Nazi Holocaust was "a myth".
Mr Ahmadinejad said he did not believe six million Jews had died at the hands of the Nazis last century.
Germany said his comments could harm attempts to restart nuclear talks.
A White House spokesman said the comments showed the need to "keep Iran from developing nuclear weapons".
"All responsible leaders in the international community recognise how outrageous such comments are," said spokesman Scott McClellan.
'Shocking' comments
Mr Ahmadinejad made the comments while speaking on live TV in the south-eastern city of Zahedan.
"They have created a myth today that they call the massacre of Jews and they consider it a principle above God, religions and the prophets," he said.
He called for Europe or North America - even Alaska - to host a Jewish state, not the Middle East.
German Foreign Minister Frank-Walter Steinmeier told reporters Mr Ahmadinejad's remarks were "shocking".
"I cannot deny that they may weigh on...the chances for the negotiations on the so-called nuclear dossier," he said.
German Chancellor Angela Merkel wants EU leaders to discuss Iran's stance
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The German foreign ministry also said Chancellor Angela Merkel wanted to hold a meeting of EU leaders this week in Brussels to tell Iran "these remarks are totally unacceptable".
Israel's spokesman said the Iranian president's latest remarks reflected a "perverse vision of the world held by this regime".
The outburst by Mr Ahmadinejad follows earlier anti-Israeli comments.
He has brushed aside criticism of his views, saying it was orchestrated by supporters of Israel.
The president also returned to his earlier theme that Europe should shoulder the responsibility for a Jewish state.
"If you [Europeans] committed this big crime, then why should the oppressed Palestinian nation pay the price?
"This is our proposal: give a part of your own land in Europe, the US, Canada or Alaska to them so that the Jews can establish their country," he said.
Since his election in June, Mr Ahmadinejad has taken a more hardline stance towards Israel in public than his predecessors.
BBC Tehran correspondent Frances Harrison says the Iranian press has endorsed the president's views, calling them logical and less passive than the approach of previous Iranian governments.
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