Iran has test fired a new short-range missile equipped with a guidance system it plans to install on all future missiles it builds, Ahmad Vahidi, the defence minister, has said, adding the test was "successful".
"With the fourth-generation of the Fateh 110, the armed forces of our country are able to target and destroy land and sea targets, enemy headquarters... missile seats, ammunition sites, radars and other points," Vahidi said in quotes carried by Islamic Republic News Agency on Saturday.
The Fateh 110 has a range of around 300km, IRNA reported, meaning it would only be able to strike Iran's immediate neighbours.
Vahidi claimed the weapon could strike with pin-point precision, making it the most accurate weapon of its kind in Iran's arsenal.
"By reaching this generation of the Fateh-110, a new capability has been added to our armed forces in striking sea and land targets," state TV quoted Vahidi as saying.
The launch drew swift reaction from the United Kingdom although there was no immediate comment from Washington, which suspects Iran of building a nuclear bomb.
Britain's foreign office said in a statement that it was concerned by the reports of the missile test.
"This move calls into question again Iran's stated commitment to a purely peaceful nuclear programme," the ministry said on Saturday.
"We remain concerned that Iran continues to develop missile technology with the clear intention of extending the range and sophistication of its missiles."
Threat against Israel
Iran's military leaders have threatened that Israel, which also suspects Tehran of developing nuclear weapons and has hinted at a military strike on the Islamic Republic's nuclear facilities, "would disappear from the Earth" if it attacks Iran.
Military commanders have also warned that 35 US military bases in the Middle East are within Iran's missile range and would be destroyed within seconds after any US attack on Iran.
Israel is about 1,000km away from Iran's western borders, while the US Navy's Fifth Fleet is based in Bahrain, some 200km from Iranian shores in the Persian Gulf.
Meir Javedanfar, an expert on Iran at Israel's Interdisciplinary Centre in Herzliya, said the test was a warning to the West.
"The test firing of the missile is most likely to be a warning to the West and Iran's Persian Gulf neighbours that Iran too can escalate the level of tensions in the Persian Gulf area," he told the Associated Press news agency.
Bruno Gruselle, senior research fellow at the Foundation for Strategic Research in Paris, said any improvements in the accuracy of Iran's short-range missiles might be a precursor to better long-range ones.
"Fateh is a very short range guided rocket and a good platform to test improved guidance," he said.
"They will have to take that to longer range systems which have very different mechanical constraints during their flight, but they will obviously work on that."
Iran's military leaders say they believe future wars will be air- and sea-based, and Tehran has sought to upgrade its air defence systems and naval power in anticipation of such a possibility.
The Fateh-110, or Conqueror, is a single-stage solid-propellant, surface-to-surface missile put into service in 2002.
The earlier version of the domestically-produced missile had a range of 200km.
The weapon was developed by Iran's Aerospace Industries Organisation. Iran also has a variety of long-range missiles, including a Shahab-3 variant with a range of 2,000km that can reach Israel and southern Europe.
Many of its missiles could in theory carry a nuclear warhead.
The Pentagon released a report in June noting significant advances in Iranian missile technology, acknowledging that Tehran has improved the accuracy and firing capabilities of its missiles.
Earlier this week, Leon Panetta, the US defence secretary, warned that Iran must either negotiate acceptable limits on its nuclear programme or face the possibility of US military action to stop it from getting the bomb.
Panetta made his remarks on Wednesday outside a city in southern Israel, with an "Iron Dome" anti-rocket defence system as a backdrop.