TEHRAN, Jan 20: Iran issued a new warning on Thursday that it would respond to any threat by the United States in an escalating war of words over Tehran's nuclear activities which Washington claims is a cover for developing the bomb.

Foreign Minister Kamal Kharazi said during a trip to Uganda that his government would answer a threat of any kind from its arch foe, adding: "We are not afraid of that country's threats," the state news agency, IRNA, reported.

Iran vehemently denies it is developing nuclear weapons, insisting that its nuclear programme is merely directed at generating electricity.

Kharazi, touring Africa with President Mohammad Khatami, said Washington was using 'psychological warfare' against Iran.

"They have initiated a psychological game in order to influence us, but we have experience in this field... the Iranian nation will not show weakness in the face of threats, and will defend its interests."

Iran's ambassador in London Seyed Mohammad Hossein Adeli also warned Bush that a US strike on Iran would deepen the isolation of the superpower, further damage its image abroad and destabilize the world.

"Waging war against Muslims and ignoring its allies, including the Europeans, created tensions, instability, a less secure world and created an ocean of mistrust between the United States and the rest of the world," he said.

"The Americans unfortunately are continuing to do false accusations on Iran," Adeli said, stressing that the diplomatic route, rather than a US hardline, was leading to effective negotiations.

Iran has suspended its sensitive work on the nuclear fuel cycle while talks with Britain, France and Germany are in progress.

A report published in theNew Yorkermagazine this week said US commandos had been operating inside Iran since mid-2004 to search out potential targets for attack. However the Pentagon said the report was 'riddled with errors'.-AFP