The Palestinian Authority has reacted sharply to a fierce personal attack on its leader, Yasser Arafat, by the supreme leader of Iran, Ayatollah Ali Khamenei.

The secretary-general of the Palestinian presidency, Tayyib Abdel-Rahim, said the Ayatollah's comments were baseless, irresponsible and lacked credibility -- and he advised Mr Khamenei to stop encroaching on Palestinian and other Arab affairs.

In an address earlier to Muslim worshippers in Teheran -- the thousandth Friday prayer session since the Islamic Revolution -- the Ayatollah denounced Mr Arafat as a traitor and American lackey, saying the latest Middle East peace agreement meant the Palestinians could continue living only as slaves to Israel.

Ayatollah Khamenei described Mr Arafat as steeped in selfishness and materialism and unworthy to lead the Palestinian resistance.