Rouhani criticised a new US-led coalition patrolling the region's waterways as nationwide parades on Sunday showcased the Islamic Republic's military arsenal.

He separately promised to unveil a regional peace plan at this week's upcoming high-level meetings at the United Nations, which comes amid heightened Mideast tensions following a series of attacks, including a missile-and-drone assault on Saudi Arabia's oil industry.

The US alleges Iran carried out the September 14 attack on the world's largest oil processor in the kingdom and an oil field, which caused oil prices to rise by the biggest percentage since the 1991 Gulf War.

While Yemen's Iranian-allied Houthi rebels claimed the assault, Saudi Arabia says it was "unquestionably sponsored by Iran".

For its part, Iran denies being responsible and has warned any retaliatory attack targeting it will result in an "all-out war".

The denial comes as Iran has begun enriching uranium beyond the terms of its 2015 nuclear deal with world powers, which the US unilaterally withdrew from over a year earlier.

Rouhani spoke from a platform at the parade in Tehran, with uniformed officers from the country's military and its paramilitary Revolutionary Guard beside him.

He later watched as marching soldiers carrying sub-machine guns and portable missile launchers drove past as part of "Holy Defence Week," which marks the start of the Iran-Iraq war in 1980.

Rouhani said Iran was willing to "extend the hand of friendship and brotherhood" to Persian Gulf nations and was "even ready to forgive their past mistakes".

He added that the US and Western nations should "distance" themselves from the region.

"Your presence has always been a calamity for this region and the farther you go from our region and our nations, the more security would come for our region," he said.

He said Iran's plan would focus on providing security in the Persian Gulf, the Strait of Hormuz and the Gulf of Oman "with help from regional countries".

Iran has boosted its naval co-operation with China, India, Oman, Pakistan, and Russia in recent years.

The US maintains defence agreements across the Persian Gulf with allied Arab nations and has tens of thousands of troops stationed in the region.

Since 1980, it has viewed the region as crucial to its national security, given its energy exports.

A fifth of all oil traded passes through the Strait of Hormuz, the narrow mouth of the Persian Gulf.

The US plans to send additional troops to the region over the tensions.

Australian Associated Press