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Iran eyes 'constructive engagement''—but not with Israel

Iran wants "constructive engagement with the world"—excluding Israel, its President Hassan Rouhani told global leaders gathered at the World Economic Forum in Davos.

(Read more: Iran's economy set for post-nuclear deal boost)

Rouhani's message to the Davos delegates was one of better political and economic co-operation, but he stressed firmly that this is only with countries which Iran recognizes, in a clear snub to Israel—which Tehran refuses to recognize and previous leaders have asked to be "wiped off the map."

Shimon Peres, President of Israel, called the speech: "A great occasion that was missed."

He added that Iran, viewed as a rogue state by much of the international community for decades, has "fingers in many horrible pies."

(Read more: Israeli anger over Iran nuclear deal)

In his much-anticipated address on the conference's second day, Rouhani stressed that developing nuclear weapons had no place in Iran's security strategy and that he sees no "impediment" to the agreement over Iranian nuclear power agreed in Geneva last year.

A deal for Iran to freeze parts of its nuclear program in return for sanctions relief took effect on January 20.

"This is a long and winding and difficult road," Rouhani told the economists, politicians and business people gathered at the conference. His very presence at the conference is a symbol of change in Iran, for years a pariah state to the West.

Rouhani also said Iran had the potential to be one of the world's 10 largest economies within the next next three decades. He opened the door to more international investment in the country, which has recently struggled economically after being unable to sell its oil abroad, and pledged that new investment contracts for the country's most valuable asset, oil, will be ready by September.

Such a change would require constitutional change in the country, which has been closed to foreign investment for years. Reformist Rouhani may need to prove the success of his nuclear agreement before he can further open up the economy.

(Read more: We are not in Iran discussions: BP chief)

"Economic policies should take social justice into consideration," he warned.

The chief executive of oil major BP told CNBC on Wednesday that his company was not in discussions to open operations in Iran.

By CNBC's Catherine Boyle. Follow her on Twitter @cboylecnbc.

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