But Ahmadinejad seemed unperturbed.
"They are aware that any strike would be confronted by a very strong Iranian response," he said.
"The Zionist entity, with all the support offered by the US administration and many Western administrations, is not lacking new weapons in its arsenal, but I believe ... it will not save it from its doomed collapse."
Israel, Washington's staunchest ally in the Middle East, says Iran could have a nuclear bomb by 2010 and that an Iranian nuclear weapon would threaten Israel's existence.
On Thursday the Israeli defence ministry said: "A successful missile launch was carried out within the framework of examining rocket propulsion."
Israel is thought to be developing the Jericho-3 ground-to-ground missile that could have a range of up to 4,500km.
|"The Zionist regime ... lacks the courage to launch any strike against the Iranian state" |
Mahmoud Ahmadinejad, Iranian President
It is also widely considered to be the Middle East's sole nuclear power with an estimated but undeclared arsenal of 200 warheads.
"Ahmadinejad thinks of Israel in terms of ideological and theological grounds," Marwan Bishara, Al Jazeera's senior political analyst, said.
"He thinks of it as a colonial state, he doesn't think of it as a sovereign state. He thinks of it as an ideology that is going to collapse like the communist Soviet Union or apartheid South Africa."
Ahmadinejad's comments came after George Bush, the US president, ended a Middle East tour that was largely devoted to bolstering a campaign to isolate Iran, which he has branded a "threat to world peace".
Ahmadinejad described Iran's nuclear programme as peaceful, saying that the widespread criticism was "political".
"The Iranians did not deviate or adopt any unlawful course in its nuclear activities, all of our activities are in harmony with the international resolutions," he said.
"They were transparent and from the very beginning we exerted the maximum co-operation with the IAEA [International Atomic Energy Agency]."
A US intelligence estimate published last year said that Iran halted its nuclear weapons efforts in 2003, a conclusion that Israel has rejected.
Robert Fisk, Middle East correspondent for the UK's Independent daily, told Al Jazeera: "Will the Israelis strike Iran? I doubt it very much. Will the Iranians try to strike Israel? I doubt it very much.
"I think this is played out for people who watch television and open newspapers.
"I don't take either of them very seriously, except that of course the Americans want to sell billions and billions more weapons to the Saudis. I am sure the Iranians would like to do the same thing."