Iran fired its longer-range Shahab-3 ballistic missile for the first time on Thursday, official media said, kicking off 10 days of war games and renewed warnings from the West over its nuclear program.
"Shahab missiles, carrying cluster warheads, with a range of 2,000 kilometres (1,200 miles), were fired from the desert near (Iran's clerical capital) Qom," state television reported.
That range is sufficient to threaten US bases in the Gulf.
The war games came amid US-led efforts to impose UN-mandated sanctions on Iran over its nuclear program.
They also came a day after a US-led naval force launched maneuvers for the first time in the Gulf near Iran in a test of capabilities to halt trafficking in weapons of mass destruction -- an initiative seen as a clear message to the Islamic republic.
US Secretary of State Condoleezza Rice chided Iran: "I think they're trying to demonstrate that they're tough."
The Revolutionary Guards fired the missile during the first phase of military maneuvers in the central desert.
"Dozens of Shahab-2 and -3, Zolfaghar-73, Scud B, Fath-110 and Zelzal have been launched in the presence of (Guards chief) General Yahya Rahim Safavi and other high-ranking commanders," the television report said.
"The cluster head of the Shahab-2 has the capability to disperse 1,400 bomblets with great destructive power."
It was the first time that Iran had fired the longer-range Shahab-3 and commanders said they would also be employing other "new equipment" during the war games.
Russia said it would monitor Iran's military moves after the reports of the missile-firing but ruled out the possibility that the Islamic republic had the technological means to create even longer-range missiles.
"If we are talking about intercontinental ballistic missiles, according to our information, Iran does not possess the technological capability" to create missiles with a 5,000-kilometer (3,100-mile) range, the head of Russian military's general staff Yury Baluyevsky told ITAR-TASS news agency.
Dubbed "Great Prophet 2," the air, land and sea maneuvers are to extend across 14 provinces with the focus on the Gulf and the Sea of Oman.
"The first and main goal of this exercise is to demonstrate power and national determination to defend the country against any possible threat," Safavi said.
"Heliport operations will be carried out in the Hormozgan region (on the Strait of Hormuz) and some of the Persian Gulf islands."
The strategic Strait of Hormuz is the obligatory passage for tankers exiting the Gulf that carry much of the world's oil supply.
The Iranian maneuvers come on the heels of naval exercises launched in the Gulf on Monday by a US-led flotilla including warships from Australia, Bahrain, France, Italy and Britain.
"That is a propaganda and political maneuver without military value," Safavi said then.
"If forces from out of the region want to jeopardise Iran's security and interests, the Revolutionary Guards and the Basij (volunteer militia) will use all their capabilities to strike their enemies and their interests," he warned.
But the Guards commander insisted Iran's exercises were no threat to its neighbours.
"This maneuver is no threat for the region or neighbouring countries," he said, adding: "Our neighbours are our friends and we consider our neighbours' enemies our enemies."
The aim of the exercises was the "defence of sensitive centres, strategic bottlenecks and confrontation of possible troubles," he said.
It is Iran's third round of war games this year. In August, the armed forces held country-wide maneuvers dubbed Zolfaghar Blow. Iran also staged Great Prophet 1 exercises in April.
Rice said on Thursday's missile test was Iran's way of telling the world "you're not going to keep us from getting a nuclear weapon".
"The world has to say to them, yes, we will," she said.
The United States and its big power partners are negotiating among themselves a package of sanctions designed to persuade Iran to give up its uranium enrichment program.
Iran insists the program is aimed at providing fuel for nuclear power plants while Washington and others suspect the ultimate aim is to develop atomic weapons.
Referring to Iran's refusal to comply with a UN Security Council resolution demanding it abandon suspect nuclear activities, Rice said: "I think the Iranians are a threat and that's why the international community's got to be strong in resisting their ambitions."