Ayatollah Ali Khamenei hailed what he called Israel's 'irreparable' military and intelligence defeat after the gunmen rampaged through the towns and slaughtered families and young festivalgoers.
'We kiss the hands of those who planned the attack on the Zionist regime,' Khamenei said during his first televised speech since the incursion.
Khamenei, wearing a Palestinian scarf and speaking from a military academy, added: 'This destructive earthquake (Hamas' attack) has destroyed some critical structures (in Israel) which will not be repaired easily. The Zionist regime's own actions are to blame for this disaster.'
But Khamenei insisted Iran, a key long-term ally of Hamas, was not involved in the attack, which has left 900 Israelis dead and hundreds more injured.
It comes as Saudi Arabian Crown Prince Mohammed bin Salman stressed to Palestinian President Mahmoud Abbas that the kingdom will continue to stand by the Palestinians.
Bin Salman told Abbas, who heads the Fatah movement which controls the West Bank, that Saudi Arabia will continue 'to stand by the Palestinian people to achieve their legitimate rights to a decent life, achieve their hopes and aspirations, and achieve just and lasting peace.'
Crucially, Abbas is a political rival of Hamas, which controls the Gaza strip and launched the attack on Israel. Bin Salmon told Abbas he was working with international parties to prevent 'an expansion of the conflict'.
Saturday's assault, the biggest incursion into Israel in decades, coincides with U.S.-backed moves to push Saudi Arabia towards normalising ties with Israel in return for a defence deal between Washington and Riyadh, a move that would slam the brakes on the kingdom's recent rapprochement with Tehran.
Meanwhile, Khamenei hailed Hamas's assault on Israel before denying it had any part in it Israel has long accused Iran's clerical rulers of stoking violence by supplying arms to Hamas.
And Western officials last night said Tehran had provided the Hamas terrorists with military training and logistical help as well as tens of millions of dollars for weapons ahead of the surprise incursion.
The officials said Hamas had been planning the assault on Israel for at least a year, reports the Washington Post.
They said that while they have no evidence that Tehran authorised or directly coordinated the attack, the incursion reflected Iran's years-long ambition to surround Israel with paramilitary fighters armed with sophisticated weapons.
'If you train people on how to use weapons, you expect them to eventually use them,' said a Western intelligence official.
Backing the Palestinian cause has been a pillar of the Islamic Republic since the 1979 revolution and a way the Shi'ite-dominated country has fashioned itself as a leader of the Muslim world.
The top U.S. general on Monday warned Iran not to get involved in the crisis, saying he did not want the conflict to broaden.
At least 900 Israelis have been killed by the terrorists since they launched the surprise attack on Saturday. And in response Israel has pounded the Gaza strip with the fiercest air strikes in the 75-year history of its conflict, killing 770 Palestinians and wounding 4,000 more.
Israel said earlier on Tuesday it had re-established control over the Gaza border and was planting mines where militants had toppled the barrier during their bloody weekend assault, after another night of relentless Israeli air raids on the enclave.
Khamenei said an attack on Gaza would 'unleash a much heavier torrent of anger'.
'The occupying regime seeks to portray itself as a victim to escalate its crimes further... this is a misguided calculation... It will result in even greater disaster,' Khamenei said.
Iran took the lead on Saturday in celebrating the Hamas assault in which at least 1,500 gunmen stormed the border before carrying out a bloody rampage through Israeli communities that left more than 900 dead and saw streets strewn with bodies.
The Israeli army said it was the single deadliest event in the nation's history, and has responded with a ferocious bombardment of Gaza where officials say at least 770 people have been killed.
It has called up hundreds of thousands of reservists and placed the Gaza Strip, the crowded home to 2.3 million people, under a total siege.
Israeli media said the death toll from the Hamas attacks had climbed to 900 people, mostly civilians gunned down in their homes, on the streets or at a dance party. It dwarfs the scale of any past attack by Islamists apart from 9/11. Scores of Israelis were taken to Gaza as hostages, with some paraded through the streets.
Nearly 700 Gazans have since been killed in Israeli strikes, according to officials, and whole districts have been flattened.
The United Nations said 180,000 Gazans had been made homeless, many huddling on streets or in schools. Smoke and flames rose into the morning sky, while bombardment of the roads often made it impossible for emergency crews to reach the scene of strikes.
At the morgue in Gaza's Khan Younis hospital, bodies were laid on the ground on stretchers with their names written on their bellies. Medics called for relatives to pick up bodies quickly because there was no more space for the dead.
There were heavy casualties in a former municipal building struck while being used as an emergency shelter for displaced families.
'There is an extraordinary number of martyrs, people are still under the rubble, some friends are either martyrs or wounded,' said Ala Abu Tair, 35, who had sought shelter there with his family after fleeing Abasan Al-Kabira near the border. 'No place is safe in Gaza, as you see they hit everywhere.'
In Israel, there has still been no complete official count of the dead and missing from Saturday's attacks. In the southern town of Be'eri, where more than 100 bodies have been retrieved, volunteers in yellow vests and face masks solemnly carried the dead out of homes on stretchers.