Iran says test-fires missiles over threats of attack

DUBAI (Reuters) -Iran said on Tuesday it had successfully tested medium-range missiles capable of hitting Israel in response to threats of military action against the country, Iranian media reported, the latest move in a war of nerves with the West.

Israel says it could attack Iran if diplomacy fails to secure a halt to its disputed nuclear energy program. The United States also has military force as a possible option but has repeatedly encouraged the Israelis to be patient while new economic sanctions are implemented against Iran.

The Islamic Republic announced the "Great Prophet 7" missile exercise on Sunday after a European embargo against Iranian crude oil purchases took full effect following another fruitless round of big power talks with Tehran.

Iran's official English-language Press TV said the Shahab 3 missile with a range of 1,300 km (800 miles) - able to reach Israel - was tested along with the shorter-range Shahab 1 and 2 and other missile classes.

"The main aim of this drill is to demonstrate the Iranian nation's political resolve to defend vital values and national interests," Revolutionary Guards Deputy Commander Hossein Salami was quoted by Press TV as saying.

He said the tests were in response to Iran's enemies who talk of a "military option being on the table".

"The maneuvers are an answer to the rude words spoken against Iran," Fars news agency quoted him as saying.

On Sunday, Iran threatened to wipe Israel "off the face of the earth" if the Jewish state attacked it.

Analysts have challenged some of Iran's military assertions, saying it often exaggerates its capabilities.

Senior researcher Pieter Wezeman of the Stockholm International Peace Research Institute said Iran's missiles were still relatively inaccurate and of limited use in conventional warfare. With conventional warheads, "their only utility is as a tool of terror and no more than that," he said by telephone.

He added, however, that they could be suitable for carrying nuclear warheads, especially the larger ones.

Another think-tank, the International Institute for Strategic Studies, said in a 2010 report that all of Tehran's ballistic missiles were "inherently capable of a nuclear payload", if Iran was able to make a small enough bomb.

Iran denies Western accusations that it is seeking to develop nuclear weapons capability. The world's No. 5 oil exporter maintains that it is enriching uranium only to generate more energy for a rapidly growing population.