Iran’s president told his nation on Saturday that Western-led sanctions  were hurting his country, but Tehran was fighting back with a “smart economic war.”

Speaking on state TV, Mahmoud Ahmadinejad said Iran had managed to mitigate most of the sanctions, which have mainly targeted the country’s oil and financial sectors.

“Targeted sanctions, which the enemies say are supposed to be crippling, have led to a drop in our oil” sales, Ahmadinejad said, according to AFP. “They do not even let us transfer the oil money. They thought Iran’s economy would break down, but it did not.”

“Iran is engaged in a smart economic war with the enemy,” he added.

The US and the EU have led international efforts to embargo Iranian oil, which forms the backbone of the country’s economy, as a means of pushing Tehran to curb its nuclear program, which is widely believed to be for military purposes, though Iran says it is peaceful.

Both the US and the EU have described the sanctions as “crippling,” citing the shrinking value of the Iranian rial as proof of their efficacy.

On Saturday, Ahmadinejad admitted that some Iranians had been affected by the measures.

“Heavy pressure [has] been exerted on some Iranians because of sanctions,” he said.

The leader, who will step down next year, would not say how his country had managed to blunt the effect of the sanctions — analysts believe Tehran has taken to using gold to carry out international financial transactions, as well as masking their ships by flying other flags — but said Iran was looking to create a non-oil-based economy for the future.

“We have prepared long-term plans to decrease dependency on oil-generated money. We will not allow them to use economic measures as a tool for putting pressure on us anymore,” he said.

Last week, Ahmadinejad said that Western sanctions could at the most cause a “quick tap on the brakes” in Tehran’s nuclear program but would not slow it down substantially.

“You think that by resorting to oil and currency issues, you are able to press the Iranian nation and stop it from its path? You are wrong. Maybe this works like a quick tap on the brakes in driving, but the Iranian nation will find its way quickly and will continue,” Ahmadinejad was quoted saying by Iran’s state TV.

Despite the sanctions, talks between Iran and the group of six world powers — the five permanent Security Council members plus Germany — have failed to yield any results in over a year of meetings.

Israeli officials say Iran is near the threshold of reaching nuclear weapons capability and have threatened to use military force is sanctions and diplomacy don’t bear fruit.

The Associated Press contributed to this report.