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Iranian supreme leader Ayatollah Ali Khamenei called Friday for the destruction of Israel, saying it was the only way to solve the problems of the Middle East.

Khamenei's remarks came as millions of Iranians held rallies across Iran to protest Israel's control over Jerusalem, the city where Muslims believe the prophet Mohammed began his journey to heaven. The demonstrations for Al-Quds Day -- Al-Quds is the Arabic name for Jerusalem -- spilled over into anti-American protests because of U.S. support for Israel.

"The hands of the U.S. are fully stained with the blood of the Palestinians," Khamenei told hundreds of thousands of Iranians in his Friday prayer sermon at Tehran University. He said there is only one possible solution to unrest in the Middle East, "namely the annihilation and destruction of the Zionist state."

Khamenei also attacked the Palestinian Authority and Palestinian leader Yasser Arafat.

"When they started the talks, I said that this man (Arafat) is a traitor and stupid, too. If he was a smart traitor, he would have at least acted in a better way than this," Khamenei said.

The demonstrators held a rally on the way to the university campus, chanting, "Death to Israel, death to America." A banner carried a slogan by the late Iranian leader Ayatollah Ruhollah Khomeini: "Quds is part of Islam's body."

In 1979, Khomeini declared the last Friday of the Islamic holy month of Ramadan as Al-Quds Day, a day of protest to show the importance of Jerusalem to Muslims. Jerusalem is the third holiest site in Islam, after the Saudi Arabian cities of Mecca and Medina.

In Lebanon, Iranian-backed Hezbollah guerrillas marked Al-Quds Day with a rally outside the capital, Beirut. Fighters in combat gear stomped on U.S. and Israeli flags, crying "Death to Israel" and "Jerusalem is ours."

The guerrillas, who are trying to oust Israeli forces occupying southern Lebanon, took a public oath to continue their fight.

Hezbollah also warned Israel on Friday that they would usher in the new year with more suicide attacks against Israeli soldiers in south Lebanon.

In a scathing speech to a rally of more than 1,000 supporters, Hezbollah leader Sheik Hassan Nasrallah repeated Khamenei's remarks about Israel.

"There is no solution to the conflict in this region except with the disappearance of Israel," he told the crowd. "Peace settlements will not change reality, which is that Israel is the enemy and that it will never be a neighbor or a nation."

The rally, held outside Hezbollah's headquarters in Beirut's southern suburbs, followed the group's first suicide attack against Israeli troops in years. It also comes three days before Lebanon's political master Syria begins a second round of peace talks with Israel in the United States.

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