"Zionists have lost the sense and philosophy of their existence and they know that they have reached the end of their life and passage," Ahmadinejad said at a rally in Tehran, which was held in support of Palestinians.
He added that "the recent catastrophe in Gaza, inhumane crimes and inadequate behavior of Zionists prove they are frustrated by the realization of this fact."
A five-month truce brokered by Egypt in June between Israel and Palestinian militants in Gaza was broken last month and led to the resumption of an Israeli blockade of the border with the enclave, cutting the supplies of essential goods to some 750,000 of its residents.
"The pressure of the Zionist regime on the people of Palestine is another attempt to improve its teetering position," he said.
Ahmedinejad is known for anti-Israeli rhetoric, which adds to Western concerns over Iran's nuclear program. Most notoriously he said Israel must be wiped off the map and called on Europe or North America to host a Jewish state.
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Islamic terrorism is gaining momentum, and is all about ideological opposition to European Christian values. This is an aggressive young radical ideology that attracts followers across the world. And it will only grow stronger on the world political stage.