A reformist challenger to Iranian President Mahmoud Ahmadinejad has criticized the hard-liner's denial of the Holocaust, saying it has served Israel's interests and pushed the country deeper into international isolation, a newspaper reported Saturday.

Moderate cleric Mahdi Karroubi is one of two reformist candidates hoping to unseat Ahmadinejad in the June 12 presidential election. The former parliament speaker has said he would pursue a foreign policy of detente with the West and wouldn't mind meeting President Barack Obama if it would help Iran's national interests.

"Ahmadinejad offered the greatest service to Israel by raising the Holocaust issue because the whole world stood to support Israel, Karroubi was quoted as saying by Etemad-e-Melli newspaper," which he controls.

The Iranian president has repeatedly claimed the Holocaust is a myth and even sponsored an international conference in 2006 to debate whether the World War II genocide of Jews took place.

Ahmadinejad has also called for Israel's elimination, although his exact remarks have been disputed. Some translators say he has called for Israel to be wiped off the map. Others say a better translation would be vanish from the pages of time - implying Israel would disappear on its own rather than be destroyed.

The leading reformist candidate, Mir Hossein Mousavi, has similarly slammed Ahmadinejad for waging a fierce rhetorical battle with the international community, leaving Iran with few friends to help protect its interests.

"Today, excluding a few friends we've had for a long time, we have no appropriate interaction with the international community and are subject to threats," Mousavi was quoted as saying by Aftab-e-Yazd newspaper.

Apart from Israel, Ahmadinejad's most intense fight with the international community has been over Iran's nuclear program. Iran, the world's fourth largest oil producer, says its nuclear efforts are peaceful and focused on producing electricity. But the U.S., Israel and many of their allies suspect the Iranians are determined to develop the capability to build atomic weapons.

Ahmadinejad's hard-line stance has prompted the United Nations Security Council to impose three rounds of economic sanctions for its refusal to halt uranium enrichment, a technology that can be used to produce nuclear fuel or an atomic bomb.

Many reformists and conservatives have criticized the president for spending too much time slamming the U.S. and Israel and not enough trying to fix the economy, which suffers from high inflation and unemployment despite huge oil revenues.

Mousavi said Ahmadinejad ignored economists who warned that the president's plan to make direct cash contributions to the masses would worsen inflation and burn through oil revenues that the government relies on for 70 percent of its budget.

"When economic experts warned that liquidity resulting from oil revenues would cause problems, nobody heeded the warnings," Mousavi was quoted by the paper as saying.

Ahmadinejad was elected in 2005 on a populist agenda promising to bring oil revenues to every family, eradicate poverty and tackle unemployment. The president has defended his cash distributions, saying they would create jobs. But Iran's unofficial unemployment rate tops 30 percent.