As tensions mount in the Gulf over Iran's nuclear ambitions, Israel is reported to have armed its new fleet of submarines supplied by Germany with nuclear tipped cruise missiles, according to PTI.

Three "Dolphin" class diesel-electric submarines delivered to Israel recently by the Howaldswerke Deutsche Werft (HDW) shipyard had been armed with medium-range missiles carrying nuclear warheads, Der Spiegel magazine reported.

Israel, according to a western estimate, is the Middle East's sole, but undeclared nuclear-armed power and the reports of its arming the German acquired submarines with N-warheads may touch off a debate in Germany.

The magazine claimed that Berlin has so far denied that German submarines were being used as parts of Israeli nuclear arsenal.

"Dolphin" class submarines are reported to be the most sophisticated conventionally powered submarines in the world. They have the advantage of remaining submerged for a long time without being detected.

They were originally intended to carry cruise missiles with a range of 1,500 km, but they can also deliver a 200 KG nuclear payload.

Der Spiegel reported that the nuclear-tipped missiles will be fired with a hitherto secret hydraulic system. The Dolphins supplied to Israel by German shipyard HDW are an upgraded version of Type 209 Shishumar class submarine sold to India.

Israel will receive three more "Dolphin" class submarines from the HDW shipyard till 2017 and it has plans to buy three more submarines, according to Der Spiegel.

Earlier this year, the German government agreed to provide Israel 135 million euros to finance one-third of the costs for the sixth submarine.