Iran says Israel not capable of threatening it

TEHRAN (Reuters) - Iran said on Monday Israel could not threaten it, a few days after a U.S. newspaper reported that Israel's air force had apparently rehearsed a potential bombing raid of Iran's nuclear facilities.

Iran and Israel have engaged in a sharp exchange of words this month over suspicions Tehran is looking to develop nuclear weapons, helping to push global oil prices higher.

"They do not have the capacity to threaten the Islamic Republic of Iran," Iranian Foreign Ministry spokesman Mohammad Ali Hosseini told a news conference.

He was asked about a New York Times report on Friday that quoted U.S. officials as saying Israeli jets conducted a long-range Mediterranean exercise this month that appeared to be a practice for a mission against Iran.

"They (Israel) have a number of domestic crises and they want to extrapolate it to cover others. Sometimes they come up with these empty slogans," Hosseini said in comments translated by Iran's English-language Press TV satellite station.

Iran's defence minister on Sunday accused Israel of "psychological warfare", but said Tehran would give a "devastating" response to any attack.

On Friday, the U.N. nuclear watchdog chief, Mohamed ElBaradei, said a military strike on Iran would turn the Middle East into a fireball and prompt Tehran to launch a crash course to build nuclear weapons.

EU SANCTIONS

Western powers suspect Tehran is seeking to develop nuclear bombs and European Union president Slovenia said the 27-nation bloc was scheduled to agree a new round of sanctions against Iran on Monday over its refusal to stop uranium enrichment.