Iran state television said on Sunday that the Navy had test fired a Sagheb missile, which means piercing, but did not give the missile's range.

"Minutes ago it was launched from a submarine in the Persian Gulf and it hit the target," state television reported.

A navy admiral, named only as Kouchaki, told state television that the missile had been designed and produced in Iran.

"It can be installed and launched by Iran's navy. It is a long-range missile, with a very high speed and destructive power. It is also radar-evading," he said.

The Islamic Republic has three ageing Kilo class diesel-electric Russian submarines and also builds midget submarines. The Sagheb is listed as an air defence missile by the Nuclear Threat Initiative Web site (www.nti.org).

Western nations have been watching developments in Iran's missile capabilities with concern amid a standoff over the country's nuclear programme, which the West says is aimed at building atomic bombs. Iran says the programme is only civilian.
  
Iran's military also held war games in the Gulf in April. Those exercises were interpreted by analysts as a thinly veiled threat that Iran could disrupt oil shipping lanes if pushed by an escalation in the nuclear dispute.