Iran's supreme leader has denied it is developing nuclear weapons, after a new report from the UN atomic watchdog, the IAEA, sparked an international outcry.

Ayatollah Ali Khamenei said the outcry was "baseless" as Iranians' beliefs "bar us from using such weapons".

The UN report raised concerns Iran was working on nuclear weapons.

Germany said the report "confirms our great concerns", while the US warned Iran it faced consequences if it failed to meet international responsibilities.

Moscow said Iran must co-operate more actively with the International Atomic Energy Agency to convince the world its programme was peaceful.

Ayatollah Khamenei countered: "We do not believe in atomic weapons and are not seeking that." Iran has always maintained that its nuclear programme is peaceful.

Meanwhile, Iran launched its first domestically built destroyer, reportedly equipped with sophisticated radar, anti-ship and surface-to-air missiles as well as torpedoes and naval guns.

Reports said the new 1,500-tonne guided missile destroyer, Jamaran, would be deployed in the Gulf.

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