Iranian President Mahmoud Ahmadinejad has warned the US that any attack on his nation will be "severely punished".
Ahmadinejad's comments come as rhetoric between the two countries has heated up over US allegations that Iran is supporting attacks on US soldiers in Iraq and is trying to build nuclear weapons.
The White House stood by its accusations, saying US military commanders had conclusive "direct physical evidence" that Iranian weapons had been used by Shia militants against US soldiers.
But US President George W Bush rejected suggestions by critics that his administration was trying to build a case for war, calling it "political" speculation.
"I believe we still have the capacity to solve this issue diplomatically because a lot of the world now understands the dangers of Iran having a nuclear weapon," Bush said in an interview with US broadcaster C-SPAN. "We've got a comprehensive policy to solve this peacefully."
Bush called the Iranian government "belligerent, loud, noisy and threatening," adding that he hoped international sanctions and isolation would help moderate voices in the country come forward.
Ahmadinejad was asked in an interview on the US television network ABC whether he feared a US attack.
"Why should we be afraid? First, the possibility is very low. And we think that there are wise people in the US who will stop such illegal actions," he said through a translator on Monday.
"But our position is clear. Our nation has made it clear that anyone who wants to attack our country will be severely punished," he said.
US officials on Sunday released information they said proves that Iran has been funnelling weapons to militants in Iraq responsible for attacking US soldiers. Bush has said the US will take action in Iraq to protect its soldiers if Iran is found to have a hand in militant attacks.
"We're not getting ready for war on Iran, but what we are doing is we're protecting our own people," White House spokesman Tony Snow told reporters in Washington.
Ahmadinejad dodged questions about the allegations.
"We shy away from any kind of conflict, any kind of bloodshed, and we will be sad by such news," he said. "We're opposed to any kind of conflict or bloodshed."