During the traditional anniversary speech, President Khatami rejected President Bush's claims that the Islamic republic was part of the 'axis of evil' and was exporting terror and seeking weapons of mass destruction. He called on the US to 'wake up and change your policy on Iran'. Khatami, who has repeatedly called for rapprochement with the US, changed his usual moderate tone to give one of his most hardline speeches. 'The reason we are under threat is that the US, or some of its leaders, think they are masters of the world and they want the world to obey their policies,' Khatami said. 'The American people have every right to ask their leaders how long should they pay the price for their faulty policies. What policies and what reasons caused the 11 September attacks?'

Khatami also said that Iran would continue to support Palestinians in their struggle for statehood and accused Israel of 'state terrorism'. Analysts say the US verbal attacks on Tehran have given a new boost to conservatives in the country, who have sought to block Khatami's reform initiatives and policies of rapprochement ever since he was elected president in 1996.

US Secretary of State Colin Powell on 12 February reiterated Bush's accusations, but called on the reformist government to prevail over the country's conservative theocratic leadership. 'We want the best for the people of Iran,' Powell said. 'We should hope that the elected leadership of this country, which I believe holds views that are more beneficial to the people of Iran, will in due course see that their views prevail.'