Ahmadinejad was speaking a day after US Secretary of State Hillary Clinton sought Saudi Arabia’s support to help win Chinese backing for additional sanctions. Clinton said a new round of sanctions should target Iran’s Revolutionary Guards.

“Iran will retaliate ... of course, if somebody acts against Iran our response will definitely be firm enough...(to) make them regretful,” Ahmadinejad told a news conference, without elaborating. “Sanctions will not harm Iran.”

A joint letter from the United States, Russia and France expressed concern about Tehran’s nuclear work and said its decision to escalate uranium enrichment — rather than implement a nuclear fuel swap — was unjustified. Ahmadinejad said talks were still under way on the proposed fuel exchange and the issue was not yet closed.

He did not give details, but Turkish Foreign Minister Ahmet Davutoglu was visiting Tehran on Tuesday to try to salvage the UN-brokered uranium exchange deal amid growing calls for new sanctions against Iran.

Western powers had hoped the proposal, brokered by the International Atomic Energy Agency, would result in Iran sending most of its low-enriched uranium abroad for processing and ease their concerns that it might build a nuclear bomb.

Iran, the world’s fifth-largest crude exporter, says its nuclear program is solely to generate electricity so it can export more of is oil and gas.

“The case is not yet closed...we have already announced that we are ready for a fuel exchange within a fair framework. We are still ready for an exchange, even with America,” Ahmadinejad said.

But he added that such a swap should take place inside Iran, a likely non-starter for the West.

Ahmadinejad said Iran had been willing to send its uranium abroad rather than enrich it further at home, but that it had “found that there is no goodwill in this regard.”

He dismissed Clinton’s accusations that Iran was moving toward a military dictatorship.

The US military budget was 80 times larger than that of the Islamic Republic, he said.

“We don’t take her comments seriously,” Ahmadinejad said.

He said Iran was not worried about sanctions targeting its gasoline imports as the country could become an exporter of the fuel.

“They (the United States) imagine that they can prevent Iran’s oil exports. They are not able to do that,” he said, saying the United States should instead cooperate constructively with Iran.

“The only opportunity they have is to use Iran’s capabilities.”