The Sunday Times quoted Iranian officials as saying that 40,000 trained suicide bombers were ready to strike Western targets.
Doctor Hassan Abbasi, head of the Centre for Doctrinal Strategic Studies in the Revolutionary Guards, said that 29 Western targets had been identified.
"We are ready to attack American and British sensitive points if they attack Iran's nuclear facilities," he said in a speech, according to The Sunday Times.
He said that some of them were "quite close" to the Iranian border with Iraq.
The Special Unit of Martyr Seekers in the Revolutionary Guards was first spotted in March when members marched in a military parade.
The force wore explosive packs around their waists and held detonators, the newspaper said.
Iran is in a stand-off with the West over its nuclear programme, which the Islamic republic insists is for entirely peaceful purposes.
"We are ready to attack American and British sensitive points if they attack Iran’s nuclear facilities"
Head of the Centre for Doctrinal Strategic Studies in the Revolutionary Guards
Mahmoud Ahmadinejad, the Iranian president, announced last Tuesday that the Islamic republic had successfully enriched uranium itself for use as nuclear fuel, sparking a wave of international condemnations.
The International Atomic Energy Agency - the United Nations' nuclear watchdog - is due to present a report on Iran's nuclear programme on April 28.
The United States insists it is seeking a diplomatic solution but has not ruled out the use of force despite opposition from even its closest allies.