Tehran: Iran's supreme leader, Ayatollah Ali Khamenei, urged Arab nations yesterday to boycott a Middle East peace meeting in the United States, while also accusing Washington of responsibility for all of Iraq's woes.

"The United States took the initiative for this meeting to save the Zionist regime [Israel], which received a beating at the hands of Hezbollah," during the war last year with the movement, Khamenei told a crowd of hundreds of thousands at Iran's Grand Mosque.

"Every conference that has been organised in the name of peace has harmed Palestinians," he said, in a speech to mark Iran's celebration of the Eid Al Fitr holiday that follows the month of Ramadan.

"As the Palestinians themselves are not participating in this conference, how can the others [Arab states] do so," he asked, as the crowds chanted "Death to America" and "Death to Israel."

Khamenei said the conference was a 'deception' that must be shunned by Muslims all over the Middle East.

Khamenei made no reference to Palestinian president Mahmoud Abbas, who will be attending the US-sponsored meeting, expected next month, and who has been working in concert with Israeli Prime Minister Ehud Olmert to prepare for the summit, aimed at seeking an end to the Israeli-Palestinian conflict.

Instead, he spoke of Hamas, which seized control of the Gaza Strip in June after bloody battles with security forces loyal to Abbas, and which has also called for a boycott of the peace talks.

Following the Gaza takeover, Abbas dismissed Hamas prime minister Esmail Haniya and appointed a new government, which Hamas does not recognise, and whose power is limited to the West Bank.

Leading slogan

Referring to Hamas, Khamenei said the "Palestinian people put in power a government that has made resistance its leading slogan and, despite all pressure, the Palestinian government and people continue to resist."

"I counsel our Palestinian brothers not to confront each other, because the enemy is in their house."

Turning his attention to the United States and Iraq, Khamenei said it "is incapable of assuring security, either because it does not want to or because it cannot. It is responsible for all of the humanitarian, political, social and economic catastrophes that have befallen Iraq."

Mesha'al warning

Hamas's Syria-based supreme leader, Khalid Mesha'al, echoed the warning in his own holiday message, accusing Israel and the US of taking advantage of the Palestinian rift to try to wrest concessions in peace negotiations.

Mesha'al urged Abbas to accept the Islamists' invitations for dialogue.

Abbas and his allies "will find out that they are pursuing nothing but a mirage," Mesha'al said on Hamas radio.

Iran doesn't recognise Israel and wants the establishment of a Palestinian state with Jerusalem as its capital.

Khamenei, who has the final say on all state matters in Iran, has repeatedly called Israel in the past a 'cancerous tumour' that need to be removed from the Middle East.

Khamenei comments come amid growing scepticism of the conference among some Arab governments.