The president rejected the notion of good versus bad terrorism invented by some state sponsors of terrorists and called for a "uniform" policy in the anti-terror campaign.
"We should adopt a uniform standard to confront terrorists," Hassan Rouhani said.
He was speaking at the 21st International Congress on 17,000 Iranian Terror Victims in Tehran on Monday.
Rouhani said it would be impossible to root out terrorism unless some world powers cease support for terrorist groups and a "collective, international" effort is initiated.
"Terrorism cannot be eradicated as long as it is used as a tool by world powers and strong and collective global resolve is lacking."
Terrorism is in conflict with "peace", "understanding" and "negotiation", he said, adding, "Terrorists tread a path of violence and extremism."
Despite the formation of so-called anti-terror coalitions by some countries, "terror victim numbers have multiplied since 2003," he said, ISNA reported.
The president pointed to those seeking to advance their interests by providing backing for terrorists, warning that their policy will ultimately backfire and "flames they have ignited will ultimately engulf them."
Some countries, which avoid joining others to form a unified front against terrorism, are wrong to think that strife and tension in the region is in their interest, Rouhani said, asking how they square such policy of indifference to the loss of innocent lives in regional conflicts with their claims of advocating human rights.
Underlying factors contributing to spread of terrorism should be identified and addressed, he noted, "We should fight the roots of terror, including ignorance, blind prejudice, extremism, poverty, backwardness, arrogance and colonialism."
He criticized the United Nations and other international bodies for inaction toward Israel's terrorist acts, saying, "One wonders how is it possible for terrorist groups to fund themselves while world powers claim to be able to track objects as small as a car number plate via satellite."
