Martin O'Neill stepped up preparations for Thursday's UEFA Cup qualifier against Icelandic side FH Hafnarfjordur today insisting Villa can mount a serious challenge in Europe this season.

But the Villa boss is determined not to lose focus on the Barclays Premier League campaign.

Villa take a 4-1 lead into the second qualifying round second-leg and hope to confirm a place in Friday's first round draw.

O'Neill steered Celtic to the UEFA Cup Final in 2003 and believes Villa have what it takes to enjoy an extended run in the competition this term.

He said: "I want us to be involved and if we go out it will be a big disappointment but the whole idea here is eventually to build a squad so we are capable of making a challenge and sustaining it.

"I think we are contenders, I think we would be that, but we wouldn't have any guarantees. Look at Tottenham - they won the League Cup last season but their league form suffered (they finished 11th) through it and you would have never imagined it with the team they had."

"Newcastle had a really decent run in the UEFA Cup two years ago. They were unlucky to lose to Alkmaar in the quarter-finals but the run took a lot out of them and they weren't able to sustain their league form.

"So we are capable of contending, but whether we are good enough is another issue. That's something you look at but the only way to be able to cope with that is to have the squad."