"Iran has not only not been harbouring terrorists, but it has been fighting against them," said Kharazi, in South Africa for a meeting of a South African-Iranian bilateral commission.
"I think it is the US that is harbouring terrorists because right now every corner of Iraq is controlled by Americans," he said.
Kharazi accused the US of supporting armed Iranian rebels operating from Iraq, allowing them to "stay and function in Iraq" even though the group was "a registered terrorist organisation".
"If President Bush means by terrorists the al-Qaeda organisation, then not only are we not harbouring them but we have arrested them and sent some back to their countries of origin and even put some of them in prison," he said.
"I wonder if imprisonment of terrorists for prosecution means harbouring these terrorists.
If so, this is a new definition of harbouring developed by President Bush".
At his ranch in Crawford, Texas, Bush issued new warnings to both Iran and Syria, accusing the two Middle Eastern countries of "unacceptable" conduct in supporting and harbouring terrorism.
Bush said it was time for all governments in the Middle East to support Israel and the Palestinians as they strive to end their conflict.
"This includes the governments of Syria and Iran," Bush said in a joint press conference with visiting Italian Prime Minister Silvio Berlusconi.
"Today, Syria and Iran continue to harbour and assist terrorism.
This behaviour is completely unacceptable," he said.
Bush added that states, which he said supported terrorism would be "held accountable" and that terrorism undermined the prospects for Middle East peace.
"Supporting and harbouring terrorists undermines the prospects for peace in the Middle East and betrays the true interests of the Palestinian people," the US president said.
"Terrorism is the greatest obstacle to the emergence of a Palestinian state and all leaders who seek this goal have an obligation to back up their words and real actions against terror.
"And leaders who are interested in a peaceful solution in the Middle East must support the efforts of (Palestinian) Prime Minister (Mahmud) Abbas to build a democratic Palestine and ease the hardships faced by the Palestinian people," said Bush. – Sapa-AFP.
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