The Iranian supreme leader, Ayatollah Ali Khameni was quoted by state television on Wednesday as saying: "The Americans should know that if they assault Iran, their interests will be harmed anywhere in the world that is possible. The Iranian nation will respond to any blow with double the intensity."

The threat came two days before the IAEA reports on whether Iran is meeting UN Security Council demands to halt uranium enrichment.

If, as is widely expected, the IAEA reports that Iran has ignored the UN demands, then Washington, backed by Britain and France, will push for sanctions.

But the Security Council's other two veto-holding permanent members, Russia and China, oppose any embargo.

Punitive measures

As a result, the Western powers are working on a resolution that would make previous demands, contained in a March council statement, legally binding.

A council diplomat said that the US and its allies will try to introduce punitive measures in a subsequent resolution if Iran does not comply after a reasonable period of time.

Iran's nuclear energy chief, Gholamreza Aghazadeh, held talks with the head of the IAEA, Mohamed ElBaradei, in Vienna on Wednesday.

"The talks were encouraging," Mohammad Saeedi, deputy head of Iran's Atomic Energy Organization, told Reuters, saying the two sides discussed ways to resolve outstanding issues with the IAEA.

Jack Straw, Britain's foreign minister, sought to enlist China's backing on Wednesday, saying Beijing should use its growing diplomatic muscle to solve disputes with international partners.

NPT threat

"China's support for this goal, as a permanent member of the Security Council, has been valuable already and will be increasingly crucial in securing international consensus in the face of Iran's intransigence," Straw said in London.

Iran has said it would suspend relations with the IAEA if sanctions were imposed. Diplomats said this could mean withdrawing from the nuclear Non-Proliferation Treaty (NPT).

Khameni: Iran will target US
interests if attacked

Mahmoud Ahmadinejad, the Iranian president, reiterated his view on Wednesday that Iran could review its NPT and IAEA commitments if it saw no dividends from abiding by international protocols.

"We hope they fulfill their duties and make it unnecessary for the Islamic Republic of Iran to reconsider its relations with them," Ahmadinejad said.

The IAEA has said that after three years of investigation it still cannot confirm that Iran's aims are entirely peaceful, although it has found no hard proof of a military programme.

The agency points to gaps in its information, such as the status of Iran's research into P-2 centrifuges that can enrich uranium faster than the P-1 units it now operates.