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TEHRAN (Reuters) - Iran's supreme leader threatened on Friday to retaliate against the West for sanctions, a day after a U.S. newspaper said defense secretary Leon Panetta believed Israel was likely to bomb Iran within months to stop it building a nuclear bomb.

Ayatollah Ali Khamenei's defiant televised speech marking the anniversary of the 1979 Iranian revolution was the first time the top authority has spoken publicly about the impact of the new sanctions, which have strangled the Iranian economy since the start of the year.