Iran's leader said on Wednesday that President Barack Obama is pursuing the same "wrong path" as his predecessor George W. Bush in supporting Israel and described the Jewish state as a "cancerous tumor."

The comments by Supreme Leader Ayatollah Ali Khamenei are likely to frustrate the new U.S. administration which has been seeking to engage Iran but has called on Tehran to "unclench its fist."

"Even the new president of America, who has come to power with slogans about changing Bush's policies, is defending state terrorism by talking about unconditional commitment to Israel's security," Reuters reported Khamenei said at a conference on the Palestinian issue in Tehran.

"Another big mistake is to say that the only way to save the Palestinian nation is by negotiations," Khamenei said.

"Negotiations with whom? With an occupying and bullying regime, who does not believe in any other principle other than force? ... Or negotiations with America and Britain who committed the biggest sin in creating and supporting this cancerous tumor ... ?" he added.

"The way to salvation [for Palestinians] is standing firm and resisting," the supreme leader said.

Khamenei also said the Holocaust was used to "usurp" Palestinian land and said the West and Israel showed the weakness of their cause by not allowing anyone to question the Holocaust.

President Mahmoud Ahmadinejad, who previously drew fury from the West by saying the Holocaust was a "myth," told the conference: "The story of the Holocaust, a nation without a homeland and a homeland without a nation ... are the big lies of our era."

"The continuation of the Zionist regime even on one inch of the land of Palestine, because of the nature of that regime, means the continuation of crime, occupation, threat and insult to the nations," Reuters reported Ahmadinejad as saying.

The remarks came after the U.S. on Tuesday joined other major world powers in urging Iran to curb its nuclear program, in a statement notable for its moderate language and for its commitment to diplomacy to defuse the atomic standoff.

Diplomats at the International Atomic Energy Agency's 35-nation board meeting said they could not remember such a joint statement from Washington, Moscow, Beijing and the three big European powers in Vienna. The statement urged Tehran to heed U.N. Security Council demands to limit its nuclear activities and thereby reduce fears it was trying to make atomic arms.