Iranian official Mehdi Nabizadeh said Israel's assertion Iran was behind the twin bombing attacks on Jerusalem's embassies in India and Georgia on Monday were "sheer lies."
"Any terrorist attack is condemned (by Iran) and we strongly reject the untrue comments by an Israeli official," Nabizadeh was quoted as saying by IRNA. "These accusations are untrue and sheer lies, like previous times."
Iran's Foreign Ministry also joined the verbal fusillade on Israel saying Tehran "rejects the Zionist regime's accusations, which are part of a propaganda war."
The comments were carried by the Iranian Arabic-language channel al-Alam.
While Iranian officials say they condemn "any terrorist attack" they continue to fund known anti-Israel terrorist organizations like Hizbullah and Hamas throughout the region.
Foreign Minister Avigdor Lieberman, who was briefed on Monday's events, also said that Israel was aware of the culprits behind the attacks, but declined to specify who that was.
"Israeli diplomats are on the front lines," he said, adding that Israel "knows how to identity who is responsible for the blast."
Prime Minister Binyamin Netanyahu, however, explicitly accused Iran and Hizbullah of carrying out Monday's attacks saying Iran is “the largest exporter of terrorism in the world,”
Noting that Israel had thwarted several similar attempts in recent months, Netanyahu said, “Iran and its proxy Hizbullah were behind all of these attempted attacks.”
President Shimon Peres also blamed Iran and Hizbullah, saying “Israel will not be bullied” by terrorists.
Tn explosion tore through an Israeli diplomat's car in the vicinity of the Israeli Embassy in New Delhi, India, Monday, wounding the wife of Israel's Defense Attaché in Delhi and lightly injuring three others.
The injured woman was identified as Tal Yehoshua Koren. She suffered moderate shrapnel wounds to her lower body and was rushed to a local hospital for treatment.
Dehli Police Commander BK Gupta said his department's Special Cell, which handles serious incidents that impact public security in the city, will be heading the bombing probe.
They are expected to be joined by investigators from the Indian national governments Anti-Terrorism Squad.
Gupta told reporters a lone motorcyclist attached a magnetic explosive device to the car before racing off - a tactic nearly identical to that used to assassinate Iranian nuclear scientists.
The People's Mujahadeen of Iran (MEK) has been widely blamed for those attacks. Last week officials in the Obama administration accused Israel of training, funding, and aiding the MEK.