The Islamic regime is continuing to flout a UN Security Council demand for a freeze in uranium enrichment by April 28.
"The United States should be aware that it is not in a position to create another crisis in the region," Iranian Foreign Minister Manouchehr Mottaki said.
"Iran has not excluded the possibility of an American aggression against it," influential former president Akbar Hashemi Rafsanjani also said during a visit to Syria.
"Iran is undergoing psychological warfare and is resolved to defend its rights," Mr Rafsanjani said. "The United States will not risk using force".
Suicide bombers enrolled
In another display of defiance, a hardline Iranian group said it had managed to enrol 55,000 people for suicide attacks against Israel and western powers, an ominous message even though many observers see the recruitment drive as a symbolic action.
The crisis over Iran's nuclear ambitions has worsened over the past week following the regime's announcement that its scientists managed to enrich uranium to the level needed to make reactor fuel.
Iran says its program is peaceful, but enrichment technology can also be extended to make atomic weapons - hence the UN demand for a moratorium while an International Atomic Energy Agency (IAEA) probe continues.
Representatives of the five permanent UN Security Council members plus Germany will meet on Tuesday in Moscow to discuss the crisis.
The Institute for Science and International Security, a Washington-based think tank, said satellite images showed Iran has expanded and reinforced its main nuclear fuel processing facilities in Isfahan and Natanz, possibly to prepare them for a military strike.
The US is now pushing for tough UN action, with several US press reports saying military options were being looked into.
High oil prices
But Iran, buoyed by high oil prices and certain US troops are bogged down in neighbouring Iraq, appears confident it can deter any sanctions or attack.
"You can start a war but it won't be you who finishes it," General Yahya Rahim Safavi, the powerful head of the Revolutionary Guards said on Friday in one of Iran's boldest statements yet.
Iranian President Mahmoud Ahmadinejad also predicted the "elimination" of Israel.
Palestinian militant leaders, in Teheran to attend the conference, have also rallied behind Teheran, strengthening Iran's hand in the stand-off.
Hamas supremo Khaled Meshaal vowed the new Palestinian government would stand by its position, supported by Iran, not to recognise Israel and also secured $US50 million ($A68.4 million) in funding from the Islamic republic.
Islamic Jihad chief Abdullah Ramadan Shala also joined a previous pledge by Hamas and renegade Iraqi Shi'ite cleric Moqtada al-Sadr by vowing his Palestinian militant group was firmly siding with Iran.