Bush says the three countries support terrorism

On Thursday, Iran's supreme leader Ayatollah Ali Khamenei denounced Mr Bush, describing him as the bloodthirsty president of "the Great Satan".

Iraq's Vice President Taha Yassin Ramadan said Mr Bush's charge that his country was a terrorist state was "stupid and indecent".

In his speech, Mr Bush lambasted North Korea as "a regime arming with missiles and weapons of mass destruction, while starving its citizens".

Weapons programme

But Pyongyang has hit back, saying Washington's recent problems were "entirely attributable to the unilateral and self-opinionated foreign policy, political immaturity and moral leprosy of the Bush administration".

A new CIA report says North Korea is a major missile seller

"The option to strike, impudently advocated by the US, is not its monopoly," warned the foreign ministry spokesman.

"This is, in fact, little short of declaring a war against the DPRK (Democratic People's Republic of Korea)," he added.

"This makes us keenly realise once again... what a far-sighted policy it (North Korea) has pursued to equip itself with powerful offensive and defensive means," the statement said.

Intelligence report

The US Central Intelligence Agency has meanwhile released a report saying that North Korea sold numerous missiles to the Middle East and other areas of tension last year.

According to the report, the hard-line communist state is using the missile trade to fund its suspected nuclear weapons programme.

	1. Iraq: Suspected of wanting to pursue programmes to develop nuclear, chemical, and biological weapons and missile developments 2. Iran: Listed by US as state sponsor of terrorism. Washington says Tehran plans to develop weapons of mass destruction 3. North Korea: The US's main concern has been missiles and other weapons programmes and willingness to export sensitive technology See also: Detailed clickable map

"Exports of ballistic missiles and related technology are one of the North's major sources of hard currency, which fuel continued missile development and production," it said.

"During the second half of 2001, Pyongyang continued its attempts to procure technology worldwide that could have applications in its nuclear programme," it added.

The BBC's Kevin Kim in Seoul says it is not the first time such inflammatory rhetoric has passed between Washington and Pyongyang - US officials have long called North Korea a rogue state and its leader, Kim Jong-il, a dictator.

South Korean fears

But as the rhetoric escalates, uneasiness in South Korea is growing.

Our correspondent says South Korea's budding ties with the North have fast deteriorated since Mr Bush came to power - something many critics believe is due to a hardening of US policy towards North Korea.

Ayatollah Khamenei described America as "the Great Satan"

Mr Bush's speech has sparked similar anger in both Baghdad and Tehran.

On Thursday Iran's Ayatollah Khamenei lambasted America, describing it as "the Great Satan" and said "the Islamic Republic of Iran is honoured to be the target of wrath and anger of the most hated Satan in the world".

In Iraq Ath-Thawra, the newspaper of the ruling Baath party branded Mr Bush as stupid, arrogant and irresponsible.

"One year after George W Bush took office the whole world has come to know his superficiality, his lack of experience, his irresponsibility and his arrogant policies," it said.