Mohammad Khatami also voiced regret at a "wall of misunderstanding" between the United States and Tehran, which Washington accuses of wanting to build nuclear weapons.
In an interview with BBC radio, he said that former US president Bill Clinton had taken steps to restore ties between Washington and the Islamic Republic in the 1990s, when Khatami was in office in Tehran.
"Unfortunately after president Clinton and the Republicans taking over there has been an aggressive policy and the American policies in Iraq and other regions has contributed further to this misunderstanding," he said.
"I hope that American experience through its policies which has contributed to great fundamentalism and extremism in the world would be an experience to reconsider its policies."
Khatami is on a four-day visit to Britain. On Tuesday, he was given an honorary degree by Saint Andrew's University in Scotland, while on Wednesday he delivered a keynote address to London's Chatham House think-tank.
In Wednesday's address he said the US-led invasion of Iraq had increased the threat to the world from extremists.
On Thursday he returned to the subject, arguing that a troop pullout would be a good thing for the country.
"I believe that removal of the occupation will remove the excuse from the destructive extremists and this will be a major step towards securing Iraq's future," he said, in comments translated into English.
He also reiterated a warning that US policies in the Middle East were fuelling militants around the world.
"Some Western countries are adopting extremist policies which are contributing to radicalism in other countries, including the policies adopted by the US over the last four or five years," he said.
"Even the moderating movement in the Islamic world, which has called for democracy and involvement and participation, have been influenced by this radicalism and extreme policies of Mr. Bush."
Khatami, who was widely seen as a moderate, was succeeded last year by President Mahmoud Ahmadinejad -- who has led his country into a high-stakes stand-off with the West over its nuclear plans.
Tehran says it simply wants to develop nuclear energy technology, but the United States charges that this is a cover for developing atomic weapons, and Iran now faces the threat of UN sanctions.
The former president attacked Iran's critics, saying Tehran just wants to be able to produce nuclear power.
"I think that some people are seeking excuses in order to impose their own policies particularly over the nuclear issue. "We are members of the (nuclear Non-Proliferation Treaty), we are being observed by the (International Atomic Energy Agency). If there are any thoughts or lack of trust we can resolve the problem through talks," he said.
And he added: "A long time ago I said that the Middle East region should be free of nuclear weapons, and this was accepted. But unfortunately nobody took it seriously." He said it was regrettable that Israel had nuclear weapons. "We must strive hard to free our region from nuclear weapons," he said.

Copyright AFP (Agence France-Presse), 2006