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Iran says ready for nuclear flexibility

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Western powers are pursuing a two-pronged strategy that includes a mix of sanctions and diplomacy to try to force Tehran to halt uranium enrichment, a technology that can be used to produce nuclear fuel or materials for use in a warhead.

But the West has not ruled out the possibility of military strikes against Iranian nuclear facilities, and Panetta made a pointed warning on Thursday that Washington will strike back against a cyberattack, underscoring the Obama administration's growing concern that Iran could be the first country to unleash cyberterrorism on America.

Tehran for its part has announced the discovery of computer viruses at nuclear, industrial and government sites. It blames the West and Israel. Israel has said little to deflect suspicion that it tries to infect some Iranian systems.

Iranian leaders have been consistently defiant, announcing measures they say the Islamic Republic is taking to evade sanctions, defeat cyberattacks, and prepare to repulse or retaliate for a military strike.

"Many politicians ... in the U.S., Britain and other countries ... employed all their might and designs with the assumption they could bring the Islamic Republic and the Iranian nation to its knees. They are gone and even their names are forgotten but the Iranian nation is present by the grace of God," Khamenei said.

Iranian leaders have also argued that the country can always find customers for its oil and that the West is hurting itself, more than Iran, by cutting itself off from Iranian crude exports. Khamenei said Wednesday that European countries are "foolish" to support sanctions against Tehran, telling them they are sacrificing themselves for the sake of the United States.

But they also acknowledge that sanctions are taking a bite.

Iran's currency — already in steady decline for months — lost nearly 40 percent of its value earlier this month. It reached an all-time low of 35,500 to the dollar, down from 24,000 rials days earlier and close to 10,000 rials as recently as early 2011. It's now fluctuating between 29,000 rials to 32,000 rials in the open market. The decline set off limited, one-day protests in Tehran's market district.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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