Iran on Friday harshly condemned Israeli policies in the Palestinian territories amid anti-Israeli "Quds Day" rallies in the capital Tehran and other parts of the country.

At the end of the rally in Tehran, former president Akbar Hashemi-Rafsanjani gave a brief history of the formation of the Jewish state and how millions of Palestinians had become homeless following the establishment of Israel.

"No other county (than Israel) has so far violated so many United Nations Security Council resolutions," he said.

The official IRNA news agency reported that the people called for the "removal of the cancerous tumour" from the Middle East.

The late leader of the Islamic Revolution, Ayatollah Ruhollah Khomeini, had declared the last Friday of the fasting month of Ramadan to be "Quds Day," intended to be a day to call for the liberation of Jerusalem from Israeli occupation.

Jerusalem, or Quds in Arabic, is second only to Mecca in Saudi Arabia as a holy place for Muslims.

State television reported that hundreds of thousands attended Friday's state-organized Quds demonstrations and shouted the standard slogans "Death to Israel" and "Death to America."

"There are 5 million Palestinian refugees living in miserable conditions and even the living standards of the residents of Gaza are just at survival level," said Rafsanjani, calling on the Muslim world to aid the Palestinian nation.

He said that in order to enable Israel to have the "upper hand" against the Arab world, the Jewish country started its nuclear programme in 1948, including production of nuclear weapons, with the help of Britain, France and the United States.

While claiming that Israel has the capacity to build seven to eight atomic bombs every year, Rafsanjani blamed the UN Security Council for issuing resolutions against Iran's civil nuclear programmes but not against Israel's nuclear arsenals.

"Nuclear bombs in the hands of the Zionist regime (Israel) are more dangerous than in the hands of the Americans," he said while addressing his warning to the Arab states.

Since the 1979 Islamic revolution, Iran has not acknowledged Israel as a sovereign state and even refrained from using the name Israel and instead has constantly referred to the Jewish state as the "Zionist regime."

The tensions reached a peak in 2005 when President Ahmadinejad plainly called for Israel's eradication, relocation to Europe or North America, return of the Israelis to their lands of origin and later even questioned the historic dimensions of the Holocaust during World War II.

In his speech Tuesday at the UN General Assembly, Ahmadinejad said the "Zionist regime (Israel) was on a definite slope to collapse."

Iran wants a referendum to clarify the geographic and political status of the "occupied territories of Palestine" in which all Palestinians, including Jews but also the millions of Palestinian refugees, should be allowed to vote.

Ahmadinejad and other Iranian leaders have repeatedly stressed that Iran would accept the outcome of the referendum "whatever it would be."