TEHRAN, (Reuters) – President Mahmoud Ahmadinejad said on Saturday a strong Iranian military would help preserve stability in the Middle East, as Iran marked its armed forces’ day with a parade that appeared more muted than in the past.

Ahmadinejad gave a relatively low-key speech and there was little sign of the anti-Western banners and slogans normally seen at the annual event.

U.S. President Barack Obama has offered a new beginning of diplomatic engagement with Iran if Tehran “unclenches its fist”.

But while Washington favours negotiations to curb Iran’s disputed nuclear activities, the advent of a rightist government in Israel has increased international concern that it could go it alone with preventive strikes against Iranian atom sites.

Iran rejects Western accusations that its nuclear programme is aimed at making bombs. It has vowed to retaliate for any attack with missile strikes against Israel and U.S. Gulf assets. “The power of the Iranian armed forces is at the service of the nations … and will help to preserve the region’s security and stability,” Ahmadinejad said in a speech at the parade outside Tehran.

Troops marched in front of the podium where he stood with army officers. Some had uniforms in green, white or red — the colours of Iran’s flag. Others wore combat gear. Helicopters flew overhead and parachutists dropped down over the parade area near the tomb of Ayatollah Ruhollah Khomeini, the founder of the Islamic state.

Missiles, armoured personnel carriers, unmanned surveillance aircraft and small submarines with men wearing aqua-lungs standing next to them were also part of the parade.

“The enemies’ courage to pose a threat against the Iranian nation has been eliminated permanently,” Ahmadinejad said.

State television said the surface-to-surface Zelzal missile was among military hardware displayed.

But Iran did not show off its longest-range missile, the Shahab-3, which it says can hit targets 2,000 km (1,250 miles) away, putting Israel or U.S. bases in the Gulf within range.

A major air show with jet fighters was cancelled due to low visibility caused by dust, media said.

Earlier this month, the United States, Russia, China, France, Germany and Britain said they would ask European Union foreign policy chief Javier Solana to invite Iran to a meeting to find a diplomatic solution to the nuclear row.

Iran favours dialogue and will soon give its response to the offer of talks, Ahmadinejad said in remarks published on Friday.

Tehran says it needs nuclear technology to generate electricity so that it can export more of its gas and oil.

Israel, widely believed to have the Middle East’s only atomic arsenal, has described Iran’s nuclear programme as a threat to its existence. Although it says it wants a diplomatic solution, Washington has also not ruled out military action.

Military analysts say the United States could unleash vastly superior firepower against Iran, but that Tehran could hit back against Washington’s forces in Iraq and by disrupting oil supplies vital to the world economy.

Elsewhere Saturday U.S. special envoy Richard Holbrooke said that he had chatted briefly with Iran’s foreign minister at a Pakistan donors conference in Tokyo, the latest hint of a possible thaw in thorny bilateral ties.

U.S. President Barack Obama has rolled back George W. Bush’s policy of isolating Iran, and U.S. officials have sought out Iranian representatives at recent international meetings.

Asked if he had had dialogue with Iranian Foreign Minister Manouchehr Mottaki at Friday’s gathering, Holbrooke replied: “No dialogue. I ran into the foreign minister as we were milling around and we said ‘hello’ and chatted for about a minute or two.”

The United States has joined Russia, China, France, Germany and Britain in asking the European Union’s foreign policy chief to find a diplomatic solution to Iran’s disputed nuclear programmes.

Iranian President Mahmoud Ahmadinejad said in remarks published on Friday that Tehran favoured dialogue with world powers over its nuclear programme and would soon give its official response to the invitation to hold talks.

The Obama administration has said it is prepared to meet Iran without preconditions, but it has also made clear that suspension of enrichment remains the goal.

Iran, which says its nuclear programme is to generate electricity, has boasted of now running 7,000 uranium centrifuges, which can have civilian and military uses, and has vowed not to stop uranium enrichment.

Holbrooke also told a news conference that Iran had pledged over $300 million of the more than $5 billion in aid promised for Pakistan on Friday by international donors worried that an economic meltdown in the South Asian nuclear-armed country could fan popular support for al Qaeda and other militant groups.

“We were impressed and pleased at the fact that the speech by Foreign Minister Mottaki yesterday was so positive in tone towards the issues in Pakistan,” said Holbrooke.