He was speaking at an annual parade of troops, ballistic missiles and other hardware that marks the start of "Sacred Defence Week" -- the anniversary of the outbreak of war with Iraq in 1980 -- and amid mounting Western pressure on Iran's nuclear programme.

"Our enemies have understood that we are very serious in defending our security," said Ahmadinejad. The term "enemies" is usually used as a reference to the United States and Israel.

"Our nation wants peace, stability, justice and equality in international relations. We have always sought friendly relations with other countries. Our nation wants the well-being of other countries and will not do anything against their national interest," he said.

"We want the Persian Gulf to be a gulf of friendship and equality," Ahmadinejad said in a speech at the start of the parade, being staged in the south of the capital near the shrine of Iran's late Islamic revolutionary leader Ayatollah Ruhollah Khomeini.

But he warned that "if some want to again test what they have tested before, the flame of the Iranian nation will be very destructive and fiery."

"Relying on our nation and armed forces, we will make the aggressor regret their actions," Ahmadinejad warned, telling Iran's army to "prepare their defensive readiness" and calling for an "expansion of the defence industries and the utilisation of the latest technology".

The UN nuclear watchdog, the International Atomic Energy Agency (IAEA) has been investigating Iran since February 2003 on US charges that Tehran is using a peaceful civilian nuclear program to cover development of atomic weapons.

The country insists its fuel cycle ambitions are strictly peaceful and a right as a signatory of the nuclear Non-Proliferation Treaty (NPT) -- but the enrichment process can also be diverted to military purposes.

The regime has rejected demands from the European Union and United States that it abandon its enrichment programme in exchange for incentives, and last month partially ended a freeze on enrichment-related work.

It is now facing the threat of being referred by the IAEA's 35-nation board to the United Nations Security Council for possible sanctions.

Iran's top nuclear negotiator Ali Larijani vowed Tuesday to respond to being hauled to New York by limiting UN inspections and resuming ultra-sensitive uranium enrichment work itself.

He even warned that Iran might be forced to quit the NPT altogether.

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