The IRGC general said that the Lebanese militia Hezbollah had defeated Israel during their recent war. "After many years, the political and military image and hollow might of the Zionist regime was broken and the real power of Hezbollah fighters was proven. Thus, Hezbollah defeated Israel".

He described Washington and Tel Aviv as two "inter-continental threats" against Tehran. "The U.S. must be livid at Iran because of its disgraceful defeats in Iraq, Afghanistan, and Lebanon. Regarding [Iran's] nuclear dossier, it might try to create circumstances so that slowly but surely economic and political pressure is applied against Iran by the [United Nations] Security Council".

He accused Washington of plotting a "cultural" attack on Tehran by setting up new radio and television stations broadcasting into Iran, supporting dissident groups, and stepping up intelligence operations. "Therefore, the armed forces must be completely prepared in order to combat any forms of foreign and domestic threats", he said.

He charged that Britain and the U.S. were stirring ethnic and religious divisions in Iran, in particular in the provinces close to the country's frontiers.

The IRGC's primary task is to export the Islamic revolution to Jerusalem via Baghdad.

Hard-line President Mahmoud Ahmadinejad is one of many officials who stem from the IRGC.

"Sanctions represent the next step in our diplomacy, as the United States continues to persuade Iran to change its course and abandon its nuclear weapons program," Joseph said, adding that the United States is now discussing the issue with other members of the UN Security Council.

The United States has accused Iran of trying to develop nuclear weapons under the cover of civilian nuclear programs. Iran has said that its nuclear programs are for peaceful purposes only.

The latest US call for sanctions came days after Iran ignored an August 31 deadline to stop uranium enrichment, and on the eve of talks in Berlin among the five permanent members of the Security Council plus Germany.

President George W. Bush on Tuesday branded Iran's leaders "tyrants" and said they must not be allowed to get nuclear weapons, "the tools of mass murder." "It is now essential that we move to adopt sanctions against Iran," Joseph told foreign reporters in Washington.

"A nuclear-armed Iran is intolerable - not just to the United States but to the entire international community," he said. "As the president said, now there must be costs, there must be costs imposed on Iran."

Joseph also said he expected China and Russia to support sanctions, despite signs they were reluctant to punish Tehran. "I think China, like Russia and the other states that voted for the resolution, will support what is called for in the resolution," he said, referring to UN Resolution 1696, which threatened sanctions if Iran missed the deadline. The fundamental bargain has been struck."

Russia said earlier it still had reservations about imposing sanctions against Iran, but was considering the issue in the context of its desire to halt the spread of weapons of mass destruction.

"Whether we use (sanctions) or not has still to be decided, since any economic measures must be commensurate with real threats to international security," Foreign Minister Sergei Lavrov was quoted as saying by ITAR-TASS.

Iranian President Mahmoud Ahmadinejad was defiant in talks in Tehran with UN Secretary General Kofi Annan at the weekend, saying he was prepared to negotiate on Iran's nuclear program but would not accept a suspension of enrichment first.

Uranium enrichment is a process that can be used to make nuclear fuel and, in highly extended form, the core of an atomic bomb.

Joseph said it was difficult to predict how long diplomatic discussions would take, but asked whether a sanctions vote could take place this month, he said: "My own personal assessment would be yes."

But he also accused Tehran of running out the clock after the postponement of talks in Vienna on Wednesday between EU foreign policy chief Javier Solana and Iranian negotiator Ali Larijani.

"Iran has been playing for time, and I would say quite successfully, for the last three years," Joseph said.

"I think we even see it today in the context of their postponement of the meeting between Mr. Solana and Mr. Larijani."

Iran denies that its nuclear program is geared toward weapons development. But State Department spokesman Sean McCormack Wednesday said repeated Iranian intransigence had made such denials worthless. "We have gotten to a point, because of Iran's behavior, that the international community frankly doesn't believe Iran when it says that it is pursuing only a peaceful nuclear energy program."

US Under Secretary of State Nicholas Burns was leaving Washington on Wednesday for the Berlin talks.

"It is more appropriate for both sides to meet later," he said.

EU foreign policy chief Javier Solana and Iranian negotiator Ali Larijani had tentatively planned to meet in Vienna on Wednesday, ahead of talks in Berlin on Thursday between six nations trying to reach a deal with Iran over its suspect nuclear program.

Washington has led international concerns that Iran is covertly trying to develop a nuclear weapons program, something Tehran denies.

Wednesday's proposed talks had been aimed at giving diplomacy a last chance after Tehran ignored an August 31 deadline to stop uranium enrichment.

But in a sign of mounting international impatience, Russian Foreign Minister Sergei Lavrov said Wednesday Russia was considering support for UN economic sanctions against Iran.

"We will consider this from all points of view, in totality, based on our goal of not allowing the spread of WMD (weapons of mass destruction) and technology that is linked with this," state-run RIA Novosti quoted him as saying.

However, Lavrov said Russia still had reservations about imposing sanctions on Iran and he underlined Moscow's opposition to military action.

Late Tuesday US President George W. Bush stepped up his war of words against Tehran, lashing out at Iran's leaders, dubbing them tyrants, and comparing them to the Al-Qaeda terror network.

"The world's free nations will not allow Iran to develop a nuclear weapon," Bush said, adding the world was working to stop Iran "acquiring the tools of mass murder."

Iranian President Mahmoud Ahmadinejad hit back saying Bush was "nothing" compared to God's will.

"I am telling him (Bush) that all the world is threatening you since the general path that the world is taking is towards worshipping God and divinity," Ahmadinejad told a conference in Tehran.

Iran has insisted on its right to a peaceful nuclear program and continued uranium enrichment -- the strategic process which makes nuclear reactor fuel, but also atomic bomb material.

But French Foreign Minister Philippe Douste-Blazy on Wednesday urged the two sides to keep talking.

"We cannot accept a war of civilisations" between a western bloc and a Muslim bloc, he told Radio Monte-Carlo commenting on Bush's remarks.

"Good and evil are not decreed by the West in this country or that continent," he said.

Britain, China, France, Germany, Russia and the United States are to meet in Berlin on Thursday on the Iran nuclear crisis.

In Brussels, Solana's spokeswoman Christina Gallach confirmed the EU chief had also not left for Vienna, but was still ready to meet with Larijani.

"Solana is a representative of the other six and the offer was made by the six," she said.

A diplomat in Vienna, who asked not to be named, said the larger problem was that the Iranians saw Solana as merely a "messenger and want to bring European ministers into the talks but that is impossible."

"The Iranians don't want to meet Solana. He's only the postman," said another diplomat.

It is believed Solana wanted to try to seek Iranian clarifications over Tehran's 21-page reponse to an incentives deal offered by the six world powers which includes an offer to relaunch talks if Iran suspends uranium enrichment.

State TV said the Iranian air force had commissioned the Saegheh plane after many test flights in the past year.

Television footage showed the airplane taking off and launching two rockets. The plane had a small cockpit and only one pilot.

"Saegheh is capable of launching both rockets and bombs," the report said.

General Karim Ghavami, commander of Iran's air force, told state-run television that the war games were being held "to show the trans-regional forces that we are ready to defend our country up to the latest drop of our blood."

The Islamic republic is concerned about the U.S. military presence in neighboring Iraq and Afghanistan at a time when the international community has threatened to impose sanctions against Tehran because of its disputed nuclear program.

During the war-games, which began Aug. 19 and have been dubbed "The Blow of Zolfaghar," Iran has test-fired short-range, surface-to-surface missiles, submarine-to-surface missiles, a new air defense system and laser bombs.

Iran's military also test-fired a series of missiles during war games in the Persian Gulf in March and April, including a missile it claimed was undetectable by radar and could use multiple warheads to hit several targets simultaneously.

After decades of relying on foreign weapons purchases, Iran now says it is increasingly self-sufficient, claiming it annually exports more than $100 million worth of military equipment to more than 50 countries.

Since 1992, Iran has produced its own tanks, armored personnel carriers and missiles, the government said. It announced in early 2005 that it had begun producing torpedoes. The government has not said how many warplanes it will build.

Canadian troops are leading an operation west of Kandahar to oust the Taliban from an area where they have a stronghold. Fighting on the weekend claimed the lives of four Canadian soldiers on Sunday and a mistaken bombing by U.S. forces killed a fifth Canadian soldier on Monday.

"We are talking about modest reinforcements," Jones told reporters at a briefing at NATO's European military headquarters in Mons, Belgium, according to Reuters news agency.

Jones said the "level of intensity" of the Taliban attacks surprised NATO when it stepped up its campaign in southern Afghanistan in July and he acknowledged that NATO did not expect Taliban fighters to stand and fight instead of using their old tactics of hit-and-run attacks.

But Jones expressed confidence at the briefing that NATO troops would achieve their goals in the operation.

"In the relatively near future, certainly before the winter, we will see this decisive moment in the region turn in favour of the troops that represent the government," Jones said.

Jones is expected to meet generals from the 26 NATO member nations on Friday and Saturday in Warsaw, Poland. He said he is certain that the meeting will result in several hundred additional troops to support the operation.

"It will help us to reduce casualties and bring this to a successful conclusion in a short period of time," he said. Jones said the plan to is to "destroy" the Taliban resistance that is fighting the NATO operation before Taliban fighters return to the mountains for winter.

NATO troops including Canadians launched Operation Medusa, a massive anti-Taliban offensive into Afghanistan's volatile Panjwaii district on Sunday.

Canada has 2,200 troops in Afghanistan, with the majority stationed in Kandahar. Thirty-two Canadian soldiers have been killed in Afghanistan since Canada first sent troops there in early 2002.

The figures put the conflict on a par with the nine-year Soviet war in Afghanistan more than 20 years ago.

Sheila Bird, vice-president of the Royal Statistical Society, argued that official Ministry of Defence casualty figures did not give a true picture of the risks troops faced because they failed to take into account the number of soldiers deployed in different campaigns.

In a detailed statistical analysis of casualty figures, Professor Bird calculated that Isaf forces in Afghanistan were being killed at a rate equivalent to 14 a year out of every 1,000 personnel; UK forces, based largely in Helmand province, were suffering more than 11 deaths for every 1,000.

During the invasion of Iraq, which lasted 43 days, the UK lost 33 troops out of 46,00 - a rate of six a year for every 1,000 personnel.

According to Prof Bird, the figures reveal the true risk facing British forces in the region. "Our forces are facing an extremely high threat, and that threat is twice that which they were facing in major combat in Iraq," she said. "It is only slightly lower than the fatality rate that the Russians encountered in Afghanistan 20 years ago."

She told New Scientist magazine: "The commentary we are getting from politicians about this conflict does not do justice to the threat our forces now face in Afghanistan."

The report found that the death rate for UK troops was 25 times the figure expected when they were not engaged in combat.

The findings follow the recent warning from General Sir Richard Dannatt, the new head of the British army, that his troops could only just cope with the demands placed on them, and the admission by defence officials that the military situation in Afghanistan was worse than military commanders had anticipated.

Eighteen British armed forces personnel have been killed in Afghanistan this week, including three who died yesterday in clashes with the Taliban in Helmand that left a further 12 troops wounded. One soldier was killed by a suicide bomber in Kabul on Monday, and 14 died in Saturday's crash of a Nimrod reconnaissance plane. Since August 1, 27 British personnel have been killed.

Nato's top commander of operations, General James Jones, acknowledged on Thursday that the alliance had been taken aback by the extent of violence in southern Afghanistan, and urged allies to provide reinforcements.

"The death penalty was carried out on 27 terrorists in Baghdad, and the criminals were executed after they were convicted in Iraqi courts of carrying out acts of murder and rape in several Iraq's provinces," the office said in a brief statement.

The death penalty, once abolished after the U.S.-led invasion in 2003, was reinstated by the Iraqi authorities.

The latest violence came as Iraqi Prime Minister Nuri al-Maliki signed an accord with US commander General George Casey to begin taking back control of Iraq's armed forces, which had hitherto come under US command.

The handover gave Maliki operational control of Iraq's fledgling air force and navy, and began the process of putting the army's 10 divisions under a newly-created joint headquarters, independent of US control.

"It's a great step and a great day in Iraqi history," Maliki said.

"The new Iraqi army is being built by the courage of its sons, who will dedicate their lives to protect their citizenry, and today the new Iraqi army has been rebuilt on values other than sectarianism," he added.

Nevertheless, Thursday's signing ceremony only marked the beginning of the handover process. The 8th Iraqi Army Division, stationed in Najaf, will come under Iraqi command, with two more divisions added every month afterwards.

"From today Iraqi military operations will be increasingly conceived and led by Iraqi forces. It marks a milestone in the relentless journey of Iraqi forces, a study in courage, perseverance and the values of Iraq," Casey said.

He added, however, that America's troops would not head home soon.

"We will continue to fight with you to protect the Iraqi people, wherever they are threatened," he said. "We still have a long way to go."

The ceremony had been scheduled to take place last Saturday, but was delayed amid wrangling on the Iraqi side over who should sign the accord with the Americans on behalf of the government.

Violence has continued to rage across the country, particularly in and around the capital, which is in the grip of a vicious turf war between rival Sunni and Shiite factions.

On Thursday, a suicide bomber ploughed his explosives-laden car into a police fuel depot in the town centre, killing at least 12 policemen, said interior ministry spokesman Brigadier General Abdul Karim Khalaf.

Further bomb and gun attacks around the country, including several more explosions in Baghdad, brought Thursday's death toll around Iraq to at least 39.

The fractious parliament was due to debate a bill proposed by Shiite lawmakers that would allow provinces to merge into autonomous regions, raising the spectre of an Iraq formally divided into Kurdish, Sunni and Shiite camps.

This idea is fiercely opposed by many Sunnis, who fear being marooned in Iraq's barren western and central regions while rival groups exploit Iraq's rich oil reserves, and the debate was already expected to be stormy.

Sunni lawmakers also submitted a rival bill, which was expected to water down autonomy provisions in favour of a stronger central government.

Political tensions were raised still further with the kidnapping of a nephew of the 275-member assembly's Sunni Islamist speaker Mahmud al-Mashhadani, a virulent opponent of US forces and of the concept of autonomous regions.

"Gunmen abducted Ahmed al-Mashhadani last night from the western Hurriyah neighbourhood," interior ministry spokesman Brigadier General Abdul Karim Khalaf told AFP.

"We are still investigating whether it is a political, a terrorist or a criminal act," he said.

On Wednesday, Iraqi authorities hanged 27 convicted "terrorists", in one of the biggest single-day tolls since the country reinstated the death penalty in September 2005 as a tool to curb the insurgency.

Khalaf said "most of them were Iraqis," but did not reveal how many foreign nationals had been executed.