Iran vows military strikes on Israel and U.S. shipping if its nuclear facilities are targeted

The warning came as the British and U.S. navies ended a military exercise in the Gulf involving four vessels and Iran’s Revolutionary Guards began an exercise involving ‘missile squads’ at a undisclosed location.

The exercises are taking place against a backdrop of high tensions between Iran and the West over Tehran’s nuclear programme.

New threat: Iranian President Mahmoud Ahmadinejad visiting the Natanz uranium enrichment facilities

Speculation about a possible attack on Iran has risen since a report last month said Israel had practised such a strike.

An aide to Iran’s supreme leader, Ali Khamenei, said yesterday that if it is attacked Iran would hit Tel Aviv, U.S. shipping in the Gulf and U.S. interests around the world.

In a speech to Revolutionary Guards, Ali Shirazi said: ‘The first bullet fired by America at Iran will be followed by Iran burning down its vital interests around the globe.’

Fears of an escalation in the stand-off between the West and Iran, the fourth-largest oil producer, have helped push oil prices over $140 a barrel.

'The Iranian nation will never accept bullying,' Shirazi added.

Israel threat: Ali Shirazi

'The Iranian nation is a nation of believers which believes in jihad and martyrdom. No army in the world can confront it.'

In Jerusalem, Israeli Prime Minister Ehud Olmert's spokesman, Mark Regev, declined to comment on the threat to hit Tel Aviv, saying only: 'Shirazi's words speak for themselves.'

Israel, believed to be the Middle East's only nuclear-armed power, has vowed to prevent Iran from acquiring an atomic bomb. The United States says it wants to resolve the dispute by diplomacy but has not ruled out military action.

Shirazi's comments intensified a war of words that has raised fears of military confrontation and helped boost world oil prices to record highs in recent weeks.

'We will make the enemy regret threatening Iran,' Mohammad Hejazi, deputy commander of the Revolutionary Guards, said

Tel Aviv is an Israeli coastal metropolis of about 2 million people. It was hit in 1991 by Scud missiles launched by Iraqi leader Saddam Hussein during a U.S.-led war with Baghdad.

Unlike other major Israeli cities such as Jerusalem and Haifa, it is home to relatively few Arabs.

Iran has previously threatened to close the Strait of Hormuz, the sea channel which flows along its coastline at the entrance to the Gulf, if it comes under attack.

The strait is the world's most important waterway because it is the conduit for roughly 40 per cent of globally traded oil.

The Revolutionary Guards' commander of artillery and missile units, Mahmoud Chaharbaghi, said 50 brigades of his forces had been equipped with what he called smart cluster munitions.