Iran has frequently boasted about developing new weapons systems [AFP]

Mostafa Mohammad Najjar, the Iranian defence minister, told media on Wednesday that the missile has "extremely high capabilities" but is only intended for defensive purposes.

The new missile, which was named Sejil, can reach arch-enemy Israel and even southern Europe.

Iran's latest missile test followed persistent speculation in recent months of possible US or Israeli strikes against its nuclear facilities, which the West suspects form part of a covert weapons programme.

"This is a two-stage missile carrying two engines with combined solid fuel," Najjar said.

He said that Iran is ready to defend itself against any attacker.

"This missile test is in the framework of Iran's deterrent doctrine," the official IRNA news agency quoted Najjar as saying.

"It will only land on the heads of those enemies ... who want to make an aggression and invade the Islamic Republic."

Barack Obama, the US president-elect, like George Bush, the outgoing US president, has not ruled out military action although Obama has criticised the Bush administration for not pursuing more diplomacy and engagement with Tehran.

The US accuses Iran of seeking to build atomic bombs, while Iran says it only aims to generate electricity.

Iran has said it would respond to any attack by targeting US interests and Israel, as well as by closing the Strait of Hormuz, a vital route for world oil supplies.

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