Iran's military used its feet this week to send a clear message to the United States and Israel.

A colorful inspection exercise staged for Iranian leader Ayatollah Ali Khamenei and broadcast on Iranian TV featured precision drill teams massing into an American flag with a swastika and a Star of David, each "stabbed" by a formation of the Zulfiqar, the legendary scimitar of the Islamic leader Ali.

Khamenei is shown in the broadcast inspecting the drill teams, which chant to him, "Khamenei, we are your soldiers. Khamenei, at your command," according to a translation provided by the Middle East Media Research Institute (MEMRI).

Click here to view video at MEMRI.

One of the military formations spells out the words, "National Unity," MEMRI reported.

The announcer then tells viewers, " The army of the Islamic Republic of Iran is the contemporary Zulfiqar — the sword of Ali."

He goes on to say: "The faces of these warriors are radiant with love of the revolution. Together with such mythical heroes, once again we can chant epic poems about the aspirations, and relive the memory of those eight years of identity and bravery. We shout the glory of the name of Iran on the summit of fame and dignity. Our proud Iran is proud of you – its brave children."

The exhibition comes as the chief of Iran's elite Revolutionary Guards shrugged off harsh new U.S. sanctions that are the most sweeping since 1979, saying "the corps is ready to defend the ideals of the revolution more than ever before."

Washington announced the sanctions Thursday targeting the Revolutionary Guards, which the U.S. accuses of supporting terrorism by backing Shiite militants in Iraq. The sanctions ban U.S. dealings with the extensive network of businesses believed linked to the Guards — and put stepped-up pressure on international banks to cut any ties with those firms.

So far, the official Iranian response has been defiant.

On Thursday, Iran's Foreign Ministry spokesman, Mohammad Ali Hosseini, called the new U.S. measures "worthless and ineffective" and said they were "doomed to fail as before."

Gen. Mohammad Ali Jafari, the head of the Revolutionary Guards, said the sanctions tried to undermine the corps but "now as always, the corps is ready to defend the ideals of the revolution more than ever before."

Iran's economy is struggling, with dramatic price rises this year. The cost of housing and basic foodstuffs like vegetables have doubled or even quadrupled. The government also has imposed unpopular fuel rationing in an attempt to reduce expensive subsidies for imported gasoline.

China, a key ally of Iran, warned Friday that the sanctions could increase tensions over Iran's nuclear program.

"Dialogue and negotiations are the best approach to resolving the Iranian nuclear issue," the ministry said in a brief statement in response to a question from The Associated Press. "To impose new sanctions on Iran at a time when international society and the Iranian authorities are working hard to find a solution to the Iranian nuclear issue can only complicate the issue."

Israeli Foreign Minister Tzipi Livni was due to visit China over the weekend to lobby for intensified U.N. sanctions against Iran, the Israeli Embassy said Friday.

Washington has already won two U.N. Security Council sanctions resolutions. Chinese officials say China, a veto-wielding permanent member of the council, would not support further sanctions from the body.

Despite the government's insistence that U.S. and U.N. sanctions aren't causing any pain, some leading Iranians have begun to say publicly that the pressure does hurt. And on Tehran's streets, people are increasingly worried over the economic pinch.

The sanctions have heightened resentment of the United States among some in the public. But they are also fueling criticism among Iranian politicians that President Mahmoud Ahmadinejad is mismanaging the crisis with hard-line stances that worsen the standoff with the West.

Ahmadinejad and his allies are likely counting on sanctions to rally Iranians against the United States.

"Hard-liners in Tehran were looking forward for the sanctions. It helps them hide their incompetence behind the embargo," said political commentator Saeed Laylaz.

But many conservatives who once backed Ahmadinejad have joined his critics. They point to his failure to fulfill promises to repair the economy — despite increased oil revenues — and say his fiery rhetoric goads the West into punishing Iran.

Ahmadinejad's sudden replacement of Iran's top nuclear negotiator with a close loyalist over the weekend also angered many conservatives in parliament.

The Bush administration hopes its new sanctions will push companies around the world to cut their business ties with Iran. "It is increasingly likely that if you are doing business with Iran you are doing business with the IRGC," Treasury Secretary Henry Paulson said, referring to the Guards.

Ahmadinejad on Wednesday called earlier U.N. sanctions, which punish a list of Iranian companies believed linked to the nuclear program, "a pile of papers that have no value."

Most notably, the new sanctions ban transactions with two major Iranian banks, Bank Melli and Bank Mellat, adding them to a list of already banned banks. That means the banks will have difficulty turning to European banks for dollars, said Matthew Levitt, a former Treasury Department terrorism expert now with the Washington Institute for Near East Policy.

The Associated Press contributed to this report.