"We are not afraid of foreign enemies' threats and sanctions, since they know well that throughout its Islamic and ancient history, Iran has been no place for adventurism," Rafsanjani told state news agency IRNA.

On Monday, Bush said he could not rule out a resort to military action if the United States failed to persuade Iran to abandon a nuclear energy programme it charges is a cover for developing the bomb.

"I hope we can solve it diplomatically, but I won't ever take any option off the table," Bush told US network NBC.

His comments followed a report in New Yorker magazine that US commandos had been operating inside Iran since mid-2004 selecting suspected weapons sites for possible air strikes.

The Pentagon later rejected the report, saying it was "riddled with errors."

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