"(Right) now Iran provides some of the deadliest explosive devices used in Iraq to kill our soldiers," McCain said before his remarks on the United States in a global economy during the National Restaurant Association meeting in Chicago. "They might not be a superpower, but the threat the government of Iran poses is anything but 'tiny.'"

Obama, D-Ill., said Iran and other countries "are tiny compared to the Soviet Union. They don't pose a serious threat to us the way the Soviet Union posed a threat to us."

McCain said keeping nuclear materials from terrorists is the "biggest national security challenge" facing the United States.

"Should Iran acquire nuclear weapons, that danger would become very dire, indeed," he said. Negotiating with Iran, which Obama said he'd consider, "betrays the depth of Senator Obama's inexperience and reckless judgment."

Obama fired back at McCain, The New York Times said.

"Let me be absolutely clear: Iran is a grave threat," he said, but Soviet Union posed a bigger threat.

Obama said Iran has benefited from the U.S. war in Iraq.

"He (McCain) should not just talk to our friends," Obama said, "we should be willing to engage our enemies as well. That's what diplomacy is all about."