Iran Leader Claims U.S. Engaged in Plots to Save Israel

May 24: Iranian President Mahmoud Ahmadinejad waves at the conclusion of his speech at the oil refinery of the southwestern city of Abadan, Iran.

May 24: Iranian President Mahmoud Ahmadinejad waves at the conclusion of his speech at the oil refinery of the southwestern city of Abadan, Iran.  (AP)

Iranian President Mahmoud Ahmadinejad claimed Tuesday that the U.S. is engaged in plots to save Israel and protect its own interests, according to the Jerusalem Post, while speaking at a refinery where two people were killed in a blast earlier in the day.

The blast occurred just before Ahmadinejad was to inaugurate and expansion project at the 400,000 barrel per day refinery in the southwestern city of Abadan, and injured 20 people, the semi-official Fars news agency said. The explosion was blamed on a "gas leakage," but no other details were provided. Ahmadinejad himself was not injured.

During the inauguration speech, Ahmadinejad slammed the U.S.

"The main enemies of nations are the U.S., its allies and the Zionist regime (Israel). All regional countries must be vigilant," the Iranian leader said, according to the Jerusalem Post.

Ahmadinejad also accused the U.S. of hatching schemes for every Arab nation in the region.

The semi-official Mehr news agency, said at least two people were killed in the explosion that took place while the president was visiting. Mehr said Ahmadinejad ordered a special plane to airlift those critically injured to Tehran. Meanwhile, state television said the explosion occurred after Ahmadinejad had left the site and the station broadcast a live feed showing the president speaking to officials at a local hall in Abadan.

Fazel Kaebi, an Abadan resident, told The Associated Press over the phone that he saw ambulances and rescue teams rush to the site shortly after the explosion. He said the townspeople had noticed black smoke coming from the refinery in the past few days, which he speculated could have been from a fire.

Firefighters quickly extinguished the blaze, the reports said, but the extend of the damage was not immediately clear.

The country, which is the second largest exporter in the Organization of the Petroleum Exporting Countries, has been struggling to meet local demand for fuel. Its oil sector is under pressure because of sanctions linked to Tehran's controversial nuclear program, and Iran has been forced to increasingly rely on local expertise for developing its vast oil and gas resources as well as expanding its refining capacity.

The expansion at the Abadan plant is aimed at increasing capacity by about 30 percent at the century-old plant — the largest of Iran's nine refineries.

During his speech show on state TV from Abadan, Ahmadinejad appeared unperturbed about the blast and assailed the country's enemies, telling local officials that Iran is today able to meet all its domestic oil needs.

"The hopes of Iran's enemies in imposing pressure through restrictions on the sale of oil products have turned into a complete disappointment," he said.

Ahmadinejad recently took over the oil ministry's portfolio, serving as its caretaker minister, after the government merged eight ministries into four as part of a plan to slim down the bureaucracy.

His stewardship of the country's most vital sector, however, has stoked criticism, with the constitutional watchdog, the Guardian Council, ruling Monday that he cannot serve as the caretaker of the ministry. The council is close to Iran's supreme leader who has grown increasingly critical of Ahmadinejad over the past few weeks.

Aside from Iran's challenges abroad because of a nuclear program the West believes is aimed at weapons production, Ahmadinejad faces tremendous pressure domestically because of the country's battered economy. He has tried to cut costs by slashing subsidies on energy and some commodities — highly unpopular moves that economists say will only fuel inflation.

Although Iran is the world's fourth largest crude producer, insufficient refining capacity has forced it to impose a fuel rationing system. Under the plan, each car receives about 15.8 gallons of fuel at 150 cents per gallon. Higher quantities can be bought at about 260 cents per gallon.

Iran, however, has been trying to boost refining capacity to offset the fuel shortage and has said it is approaching self-sufficiency. The country consumes about 14.3 million gallons of fuel per day. Recent increase brought its production to about 13.2 million gallons per day.

Hamid Reza Katouzian, a lawmaker and member of the parliament's energy committee told Mehr news agency that he had warned about the risk of explosions Abadan because the refinery was not ready for an expansion.

Katouzian insisted that Tuesday's blast was not an act of sabotage, but a result "of a lack of readiness at the refinery."

The Associated Press contributed to this report.