In New York, defiant Ahmadinejad says Israel will be "eliminated"

Ahmadinejad also said he did not take seriously the threat that Israel could launch a military strike on Iran's nuclear facilities, denied sending arms to Syria, and alluded to Iran's threats to the life of British author Salman Rushdie.

The United States quickly dismissed the Iranian president's comments as "disgusting, offensive and outrageous."

Israeli Prime Minister Benjamin Netanyahu has hinted Israel could strike Iran's nuclear sites and criticized U.S. President Barack Obama's position that sanctions and diplomacy should be given more time to stop Tehran from acquiring nuclear weapons.

Iran denies it is seeking nuclear arms and says its atomic work is peaceful and aimed at generating electricity.

"Fundamentally we do not take seriously the threats of the Zionists," Ahmadinejad, in New York for this week's U.N. General Assembly, told reporters. "We have all the defensive means at our disposal and we are ready to defend ourselves."

Ahmadinejad is due to speak at the U.N. General Assembly on Wednesday. U.N. Secretary-General Ban Ki-moon met Ahmadinejad on Sunday and warned him of the dangers of incendiary rhetoric in the Middle East.

Ahmadinejad, who has used previous U.N. sessions to question the Holocaust and the U.S. account of the September 11, 2001, attacks, did not heed the warning and instead expanded on his previous rejection of Israel's right to exist. Western envoys typically walk out of Ahmadinejad's U.N. speeches in protest at his remarks.

"Iran has been around for the last seven, 10 thousand years. They (the Israelis) have been occupying those territories for the last 60 to 70 years, with the support and force of the Westerners. They have no roots there in history," he said, referring to the founding of the modern state of Israel in 1948.

"We do believe that they have found themselves at a dead end and they are seeking new adventures in order to escape this dead end. Iran will not be damaged with foreign bombs," Ahmadinejad said, speaking through an interpreter at his Manhattan hotel.

"We don't even count them as any part of any equation for Iran. During a historical phase, they (the Israelis) represent minimal disturbances that come into the picture and are then eliminated."

In 2005, Ahmadinejad called Israel a "tumor" and echoed the words of the former Iranian Supreme Leader, Ayatollah Ruhollah Khomeini, by saying that Israel should be wiped off the map.

WHITE HOUSE: COMMENTS DISGUSTING

In Washington, White House spokesman Tommy Vietor reaffirmed the U.S. commitment to Israel's security.

"President Ahmadinejad's comments are characteristically disgusting, offensive and outrageous," he said. "They underscore again why America's commitment to the security of Israel must be unshakeable, and why the world must hold Iran accountable for its utter failure to meet its obligations."

The United States also officially linked Iran's state oil company to the country's Islamic Revolutionary Guard Corps, a move that enables Washington to apply new sanctions on foreign banks dealing with the company.

Attending what will likely be his last U.N. General Assembly as he nears the end of his second term next year, Ahmadinejad also spoke at a high-level U.N. session on the rule of law, prompting a walkout by Israel's U.N. Ambassador Ron Prosor.

"Ahmadinejad showed again that he not only threatens the future of the Jewish people, he seeks to erase our past," Prosor said in a statement. "Three thousand years of Jewish history illustrate the clear danger of ignoring fanatics like Iran's president, especially as he inches closer to acquiring nuclear weapons."

Amir Ali Hajizadeh, a brigadier general in Iran's Islamic Revolutionary Guard Corps, was quoted on Sunday as saying that Iran could launch a pre-emptive strike on Israel if it was sure the Jewish state was preparing to attack it.

Ahmadinejad said the nuclear issue was ultimately between the United States and Iran and must be resolved in talks.

"The nuclear issue is not a problem," he said. "But the approach of the United States on Iran is important. We are ready for dialogue, for a fundamental resolution of the problems, but under conditions that are based on fairness and mutual respect.

"We are not expecting a 33-year-old problem between the United States and Iran to be resolved in a speedy fashion," Ahmadinejad said. "But there is no other way besides dialogue."

Obama will underscore his commitment to preventing Iran from acquiring a nuclear weapon and address Muslim unrest related to an anti-Islamic video in his speech to the General Assembly on Tuesday, the White House said.

'BULLYING COUNTRIES'

At the meeting on the rule of law, Ahmadinejad said states should not yield to rules imposed "by bullying countries."

Ahmadinejad said on Monday that conditions in Iran, which is under U.N., U.S. and European Union sanctions over its nuclear program, were not as bad as portrayed by some and the country could survive without oil revenues.

Britain, France and Germany called for fresh economic sanctions on Iran in a letter to European Union foreign policy chief Catherine Ashton, a top French official told reporters.

"If we want to reach a diplomatic and peaceful solution to Iran's nuclear program, then we must increase the pressure," French Foreign Minister Laurent Fabius said.

Western sanctions on Iran tightened markedly this year with an EU ban on crude oil purchases from Iran and U.S. sanctions targeting banks that deal with Iran's central bank. Those sanctions have not yielded tangible progress toward a diplomatic solution.

There will be high-level side meetings on Iran's nuclear program and the Syrian conflict during the General Assembly but U.N. diplomats do not expect either issue to be resolved soon.

Ahmadinejad's annual visits to New York, a city with a sizable Jewish population, are routinely met with protests against his anti-Israel rhetoric. United Against Nuclear Iran, a U.S. group that opposes Iran acquiring an atomic bomb, protested at the Iranian official's hotel with a banner reading "Out of the Warwick, out of New York, out of the U.N.!"

'WE SEEK PEACE IN SYRIA'

Ahmadinejad rejected charges by the United Nations and Western officials that Iran is sending arms to pro-government forces in Syria fighting rebels trying to topple President Bashar al-Assad. "The so-called news that you alluded to has been denied vehemently, officially," he said to a question.

"We see both sides as equally our brothers," he said. "The intervention and meddling from outside have made conditions that much tougher. We must help to quell the violence and help ... (facilitate) a national dialogue."

Ahmadinejad also was asked about a move by an Iranian religious foundation to increase its reward for the killing of Rushdie in response to a California-made anti-Islam video called "The Innocence of Muslims" that has sparked anti-American protests around the Muslim world.

"Where is he now?" Ahmadinejad asked of Rushdie. "Is he in the United States? If he is, you shouldn't broadcast that for his own safety.

Rushdie, an Indian-born British novelist who has nothing to do with the video, was condemned to death in 1989 by Khomeini, Iran's late leader, because of his novel "The Satanic Verses," saying its depiction of the Prophet Mohammad was blasphemous.

Ahmadinejad appeared to reject Washington's position that while it condemns the video's content, freedom of expression must be upheld. "Freedoms must not interfere with the freedoms of others," Ahmadinejad said. "If someone insults, what would you do? ... Is insulting other people not a form of crime?"

(Additional reporting by Matt Spetalnick and John Irish; Writing by Michelle Nichols and David Brunnstrom; Editing by Will Dunham and Bill Trott)