Iran's supreme leader threatened on Friday to retaliate against the West for sanctions, a day after a US newspaper said defence secretary Leon Panetta believed Israel was likely to bomb Iran within months to stop it building a nuclear bomb.

Ayatollah Ali Khamenei's defiant televised speech marking the anniversary of the 1979 Iranian revolution was the first time the top authority has spoken publicly about the impact of the new sanctions, which have strangled the Iranian economy since the start of the year.

The long-simmering confrontation between the West and Iran over its nuclear programme entered a decisive phase last month.  Iran began enriching uranium at a deep underground bunker and the US and Europe imposed new sanctions to prevent Tehran selling oil, putting its economy in a downward spiral.

Iran holds a parliamentary election in a month - its first since a 2009 presidential vote triggered a failed popular uprising - and its tightly-controlled political system will have to cope with the economic hardship caused by sanctions.

"In response to threats of oil embargo and war, we have our own threats to impose at the right time," Khamenei told worshippers in his televised speech. "Sanctions will not have any impact on our determination to continue our nuclear course," he said.

"Such sanctions will benefit us. They will make us more self-reliant ... We would not achieve military progress if sanctions were not imposed on Iran's military sector."     

Behind the sanctions looms an underlying threat of war.
 Panetta said he would not comment on - but did not dispute - a report by Washington Post columnist David Ignatius that Panetta thinks Israel is likely to attack Iran in the next few months.

Ignatius travelled with Panetta to Brussels this week. His column on Thursday was the strongest suggestion yet that Washington policymakers were bracing for an Israeli attack.

"Panetta believes there is a strong likelihood that Israel will strike Iran in April, May or June - before Iran enters what Israelis described as a 'zone of immunity' to commence building a nuclear bomb," columnist David Ignatius wrote.

"Very soon, the Israelis fear, the Iranians will have stored enough enriched uranium in deep underground facilities to make a weapon - and only the United States could then stop them militarily," Ignatius wrote.     
Panetta told reporters: "David Ignatius can write what he will but - with regards to what I think and what I view - I consider that an area that belongs to me and nobody else."     

Asked if he disputed the story, he said: "No ... I'm just not commenting."     

Three US national security officials told Reuters on Friday Washington had no specific intelligence that an Israeli attack on Iran was imminent, but they were concerned because of recent public statements by Israeli officials. The US
officials also said they believed Israel would not warn Washington in advance if it planned to strike.     

Washington, which like Israel has not ruled out an attack on Iran to stop it from developing an atomic bomb, has made clear it believes sanctions should be given a chance to work before a military strike is considered. US officials have repeatedly tried to persuade Israel to hold fire. - Reuters