"They falsely accuse the Islamic republic of producing nuclear weapons. We fundamentally reject nuclear weapons and prohibit the production and the use of nuclear weapons," Khamenei said in a speech broadcast by state television.

"They know themselves that it's not true ... but it is part of Iran-phobia policy that controls the behaviour of these arrogant governments today."

The comments came ahead of a meeting in two weeks between Iran and six world powers which have demanded Tehran halt its programme of uranium enrichment -- a process which can be used to make material for an atomic bomb.

Iran has so far defied the demand, insisting its programme is for peaceful nuclear energy. It denies accusations by the United States, European powers and Israel that it is covertly seeking to build a nuclear weapon.

The comments by Khamenei, the country's all-powerful leader, came after US Secretary of State Hillary Clinton said on Tuesday that Iran must answer "head on" concerns about its nuclear programme at the meeting with world powers.

The Iranian leader demanded that the West revise its policy.

"They must correct this. The Iranian nation is alert. They see and understand animosities and stand against them. The Islamic republic will not retreat."

Iran's talks are scheduled for October 1 with the United States, Russia, China, Britain, France and Germany. The European Union expects the meeting to take place in Turkey.

Britain's Foreign Secretary David Miliband said on Sunday that Iran must take "concrete steps" to end Western suspicion it is seeking to develop nuclear weapons.

"The Iranian issue is now a clear one and it needs to be addressed alongside the North Korean issue," he told Sky Television in an interview.

"It's time for concrete steps by Iran to show that they are willing to live within the rules of the non-proliferation treaty that has been so important in limiting the nuclear proliferation over the last 40 years."

Miliband also said he would meet counterparts from the other five world powers dealing with Iran in New York this week.

Khamenei, meanwhile, speaking two days after the annual Quds (Jerusalem) Day on which Iran held a rally cross the country, referred to Israel as a "counterfeit government."

But he denied that Iran -- a staunch supporter of the Palestinians -- was seeking a military solution to the Middle East conflict.

The supreme leader stressed it was a "lie ... claimed by Western media that Iran is attempting to destroy the Zionist regime (Israel) by military equipment."

"The Islamic republic has proposed a reasonable, logical and humane plan" the leader said, referring to its proposed referendum to decide on the future of Israel, the Gaza Strip and West Bank.

Iran has in the past boasted of test-firing ground-to-ground missiles with a range of almost 2,000 kilometres (1,350 miles), enough to strike Israel.

Russian President Dmitry Medvedev said in an interview with CNN released on Sunday that Israeli President Shimon Peres assured Russia that Israel is not planning to attack Iran.

"When Israeli President Peres was visiting me in Sochi recently, he said something very important for all of us: 'Israel does not plan any strikes on Iran, we are a peaceful country and we will not do this'," Medvedev said.

earlier related report
Iran has no need of nuclear arms: Ahmadinejad
Iranian President Mahmoud Ahmadinejad, in a US television interview on Thursday, said that Tehran has no need of nuclear arms but did not explicitly rule out the possibility Iran would acquire them.

Ahmadinejad's remarks on NBC News appeared to dampen prospects for success at a meeting in two weeks between Iran and six world powers, including the United States, which have demanded Tehran halt its uranium enrichment program.

"We have always believed in talking, in negotiation. That is our logic, nothing has changed," Ahmadinejad said in excerpts of an interview aired Thursday night on NBC television.

But, according to other remarks quoted on NBC's website, Ahmadinejad said: "If you are talking about the enrichment of uranium for peaceful purposes, this will never be closed down here in Iran."

He also declined to explicitly rule out Iran's acquiring a nuclear weapon despite being asked four times to do so.

"Nuclear arms, we believe they belong to the past and the past generation," he said through an interpreter. "We do not see any need for such weapons."

When his interviewer suggested that viewers would not be convinced by his answers, he replied: "You can take from that whatever you want Madam."

Given Ahmadinejad's public remarks, chances seemed slim for progress at Iran's talks on October 1 with the United States, Russia, China, Britain, France and Germany, which the European Union expects will take place in Turkey.

US Secretary of State Hillary Clinton said Tuesday that Iran must answer "head on" concerns about its nuclear program at the meeting, even though Tehran has so far ignored such appeals.

Clinton said the point of the meeting between Iran and the six powers is to test Tehran's readiness to discuss such concerns.

Washington will be taking its dual track, or carrot-and-stick, approach to the meeting, Clinton added.

The UN Security Council has imposed three sets of sanctions against Iran over its refusal to freeze its uranium enrichment activities and Washington has threatened to push for new sanctions if engagement with Iran fails.

The six powers -- which represent the five veto-wielding permanent members of the UN Security Council plus Germany -- are offering diplomatic, trade and other benefits if Iran cooperates.

The group called for talks with Iran after Tehran handed over a set of proposals for negotiation last week.

Washington expressed disappointment with the package of proposals, saying it was "not really responsive to our greatest concern," which is the nuclear issue, but Moscow said it offered "something to dig into."

And President Barack Obama's administration sees its role in the talks -- the first with Iran since a one-off meeting last year under his predecessor George W. Bush -- as a fulfillment of its pledge to engage the Islamic Republic.

According to a copy of the proposals obtained and published by US non-profit investigative journalism group, Pro Publica, Iran said it was prepared to hold "comprehensive, all-encompassing and constructive negotiations."

The talks would address nuclear disarmament as well as a global framework for the use of "clean nuclear energy," according to the document, but it did not address Iran's own nuclear program.

Iran says its program is for peaceful nuclear energy and denies charges from the United States, European powers and Israel that it seeks to build a nuclear weapon under the guise of its enrichment program.

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