Iran says it will retaliate with what it calls "full force" against any attack, after the Israeli prime minister called for a red line to be drawn to prevent Teheran from acquiring a nuclear weapon.
Benjamin Netanyahu told the United Nations General Assembly that - unless stopped - Iran could have enough enriched uranium for its first nuclear bomb next year.
Iranian deputy UN ambassador Eshagh al-Habib said his country was: "strong enough to defend itself and reserves its full right to retaliate with full force against any attack", the BBC reports.
He accused Mr Netanyahu of making "baseless allegations" in his address to the UN General Assembly in New York.
Mr Netanyahu told delegates at the annual meeting of the assembly that Iran could have enough material to make a nuclear bomb by the middle of next year, and a clear message needed to be sent to stop Tehran in its tracks.
On Tuesday, in his own address to the General Assembly, US President Barack Obama stressed the US would "do what we must" to stop Tehran acquiring nuclear arms.
However, while the Obama administration has not ruled out a military option, it says sanctions and multilateral negotiations with Iran must still be given time to work.
Earlier this month, Secretary of State Hillary Clinton said the US was not prepared to commit to drawing "red lines".
Israel and Western countries suspect Iran is seeking a nuclear capability. Tehran says its programme is peaceful.