Iranian President Hassan Rouhani told Iranians they should resist a "conspiracy" involving Washington.
The Israeli prime minister's comments came in direct response to IRGC political affairs spokesman Yadollah Javani, who warned earlier on Monday that Iran would attack Israel if threatened by Washington.
Prime Minister Benjamin Netanyahu on Monday threatened the Iranian regime with destruction after an Iranian military leader warned that the Islamic Republic would raze major Israeli cities if the United States attacked it.
The event was the culmination of official celebrations called the "10 Day Dawn" that mark the period between February 1 and February 11, 1979, when Shiite cleric Khomeini returned from exile and ousted the shah's last government.
Dismissing calls that Iranian regional influence should be curbed, the deputy commander of Iran's Islamic Revolutionary Guards Corps (IRGC) was quoted as saying on February 11 that "the enemy can not ask us to leave the region".
The state has played up this year's anniversary as 40 is symbolic of maturity in the Islamic tradition and the age at which Prophet Mohammed received revelations from God. "They must leave the region", said Brigadier General Hossein Salami, deputy head of Iran's Revolutionary Guards. 40 years of terror.
"Were this regime to make the bad mistake of trying to destroy Tel Aviv and Haifa, it would not succeed, but it would mean that they had celebrated their last Revolution Day". As The Times of Israel notes, "t$3 op political and military leaders in Iran regularly call for Israel's annihilation", so Javani's paean to his regime's genocidal ambitions is not at all unprecedented.
"The long-suffering Iranian people deserve a much brighter future", the American president added.
Rohani Blasts U.S. 'Conspiracy' As Iran Marks 40th Anniversary Of Revolution
Iranians are facing mounting economic hardships which many blame on the country's clerical leaders. Rouhani pledged to pursue Iran's missile programme to defend the country from external threats.
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But despite the official festivities, today's Islamic republic faces acute economic challenges as it struggles with a mix of domestic hardships and USA sanctions.
State television offered blanket coverage of the commemorations, showing marchers in cities ranging from Abadan in southwestern Iran to Mashad in the northeast.
The problem, for Khamenei, is that there is a public record of such virulent, hateful chanting going as far back as the 1979 Islamic Revolution.
Along with the chants "Death to America" and banners bearing slogans calling for "Death to Israel", Monday's marches were also a backdrop to the military's display of Iranian-made missiles, which authorities showcase every year during anniversary celebrations. "I am not ignoring the threats of the Iranian regime, but nor I am impressed by them", he said.
"We are here to support the revolution", the 57-year-old pensioner, who refused to give his first name, told AFP at the event in Tehran.
"At the revolution's 40 anniversary we are on top of scientific achievements like nanotechnology or accurate missiles", he said.
Iranian leaders say they are protecting national interests.