Ayatollah Ali Khamenei also alleged that Washington was stirring Sunni-Shiite violence in Iraq, and criticised Muslim countries who commit the "bad deed" of recognising Israel.

"Our main opponent in the nuclear issue is the American government," Khamenei said in a Friday sermon to thousands of worshippers at Tehran University.

"The Americans claim Iran is seeking nuclear weapons. We know they are lying and the audience know they are lying too. This hardline war-seeking goverment in the United States is seeking an empire and world domination."

Khamenei said the United States "will not stop in the Middle East."

"Its European partners know that when the United States dominates the Middle East and Asia, it won't leave Europe alone."

Last month the UN International Atomic Energy Agency (IAEA) warned Iran it could be hauled before the UN Security Council if it persisted with its uranium enrichment activities in violation of an agreement with Britain, France and Germany.

Iran denies charges it is seeking weapons, and argues that making nuclear fuel for peaceful purposes is a "right" it should enjoy as a signatory of the Non-Proliferation Treaty (NPT).

"Our ambitions have nothing to do with nuclear weapons. The Iranian nation will not give up this technology," Khamenei said of Iran's fuel cycle work - which could potentially be diverted to weapons manufacture.

"The Iranian nation has a right and will demand that. The Iranian nation will not have anything imposed on it by the United States or any other country," he added, dismissing Western demands as "absurd".

The so-called EU-3 has called for Iran to abandon enrichment-related work in return for a package of trade and other incentives. Iran has ruled out making such a deal.

Khamenei also described Iraq's constitutional referendum - set to cement the position of several of Iran's allies - as a "huge act" and "not absolutely in line with what America wants".

He said the US was "stressing" disputes between Shiites and Sunnis in Iraq: "The Shiite-Sunni dispute is the policy of enemies of Islam. All Iraqi groups should denounce such acts."

And Khamenei also said "Islamic states must not normalise their relations with the cruel Zionist regime, which is a threat to all, to make America happy."

"It is a bad deed and should not be committed," said Khamenei, whose clerical regime openly calls for the total destruction of the state of Israel.

But Khamenei did not refer to recent bombings and unrest in the southwestern city of Ahvaz, the capital of oil-rich Khuzestan province and dominated by ethnic minority Arabs.

Iran's foreign minister said Thursday the regime had proof that Britain was involved in last weeks double bomb attack in Ahvaz - which killed six people - and that British troops based just over the border in southern Iraq were "seeking to create insecurity in our country".

Britain said the allegations were baseless.

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