TEHRAN (Reuters) - Seven detained Baha'i believers have confessed to setting up an illegal organisation in Iran that took orders from Israel and others to undermine the Islamic system, an Iranian newspaper reported on Sunday.

The report in Resalat daily comes amid heightened tensions between Iran and Israel over Tehran's disputed nuclear plans. Israel accuses Iran of seeking atomic bombs and has not ruled out military action if diplomacy fails. Iran denies the charge.

The Resalat report appeared to refer to a group of Baha'is, most of whom were detained in May, but it did not spell this out. Judiciary officials had no immediate comment.

Baha'is regard their faith's 19th-century founder as the latest in a line of prophets including Abraham, Moses, Buddha, Jesus and Mohammad. Iran's Shi'ite religious establishment considers the faith a heretical offshoot of Islam.

"Seven Baha'i individuals have set up an illegal organisation with connections to a number of countries including Israel and they have received orders from them to undertake measures against the Islamic system," Resalat reported.

Resalat quoted an official in charge of security affairs of Tehran's revolutionary court, named only as Mr Haddad, as saying that the seven latest arrests had confessed. Revolutionary courts handle matters of national security.

"This fact led to the arrest of seven individuals. They have all confessed to the formation of an illegal organisation, including (having ties) with Israel," Resalat added.

Iran said in May it had detained six members of the Baha'i faith on security-related charges.

The Baha'i International Community had said they were members of a committee that tends to the needs of Baha'is in Iran. It said the group of six were detained in May and a seventh member was detained in March.

The Baha'i International Community represents the faith worldwide, operating under a governing council which is based in Israel, according to its website www.bahai.org.

Baha'is say hundreds of their faith have been jailed and executed since Iran's 1979 Islamic revolution. The government denies it has detained or executed people for their religion.

The Baha'i faith originated in Iran 150 years ago and Baha'is say the faith has 5 million adherents worldwide, including an estimated 300,000 or more in Iran.

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