"Even if all powers who stood behind Saddam Hussein during the sacred defence war are resurrected again against Iran, the Iranian nation will give them an historic slap in the face," Ahmadinejad said in a speech broadcast live on state television.

The president was addressing thousands gathered in Ahvaz, the capital of the western Khuzestan province which Saddam Hussein invaded in 1980 and sparked a devastating eight year war with the Islamic republic.

"The Iranian nation stands by its nuclear rights and will do its best to defend them," said Ahmadinejad.

The president shrugged off a resolution passed last month by the UN Security Council imposing sanctions over the Iranian nuclear programme, saying it was illegal and in any case would not hurt the Islamic republic.

"The resolution lacks validity and is completely political and unlawful," he told the cheering audience.

"It is a political resolution adopted under pressure from the United States and Britain, although the content of the resolution is not very significant.

"It was adopted with two objectives. Firstly, to create psychological war and propaganda against Iran and also to give an opportunity to scare some people inside the country under the pretext of a hollow resolution."

Western powers want Iran to suspend uranium enrichment, a process that they fear could be used to make nuclear weapons. Iran insists its atomic programme is entirely peaceful and it has every right to the nuclear fuel cycle.

"The Iranian nation seeks the complete exploitation of nuclear energy as its undeniable right," Ahmadinejad said.

"The nuclear issue is even more important to us than the nationalisation of oil that they (the West) opposed," he said, referring to the nationalisation of Iran's oil resources by the Iranian government in the 1950s.

Ahmadinejad did not reveal how he would respond to a bill passed by parliament that obliges the government to revise its cooperation with the UN nuclear watchdog in retaliation to the resolution.

Iran does not rule out quitting nuclear treaty
But his government spokesman said Tehran was keeping open the option of quitting the nuclear Non-Proliferation Treaty (NPT) if Western countries step up pressure on the Islamic republic over its atomic programme.

"If we are put under pressure and deprived of our rights we can use our capacity to decide whether to stay within the treaty or to quit it, Gholam Hossein Elham told reporters.

Elham said the government would decide how to revise its cooperation with the UN nuclear watchdog based on the attitude taken by the international community over the Iranian nuclear programme.

"We want to move within the framework of the treaties that we have accepted in a transparent way but being part of a treaty is a neutral thing based on duties and rights."

An Israeli newspaper, meanwhile, reported that Israel was on Tuesday to test an underground installation in the Negev desert designed to monitor any attempt by Iran, its arch-foe, to test nuclear devices.

The daily Yediot Aharonot reported that the test will consist of three strong explosions Israel will deliberately set off in the northern Negev using 15 tonnes of liquid explosives, to see how they register on equipment at the underground site.

The facility is equipped with seismographs and other equipment able to detect earth tremors and transmits the data directly to the International Atomic Energy Agency (IAEA) in Vienna, the paper said.

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