* Iran test-fires missiles ahead of talks with powers
* Guards commander says "all targets" in region within reach
* Pentagon chief speaks of new sanctions against Tehran
By Fredrik Dahl and Hossein Jaseb
TEHRAN, Sept 28 Iran test-fired missiles on Monday which a commander said could reach any regional target, flexing its military muscle ahead of this week's crucial talks with major powers worried about Tehran's nuclear ambitions.
The missile drills of the elite Revolutionary Guards coincide with escalating tension in Iran's nuclear dispute with the West, after last week's disclosure by Tehran that it is building a second uranium enrichment plant.
News of the nuclear fuel facility south of Tehran added a sense of urgency to the rare meeting in Geneva on Thursday between Iranian officials and representatives of six major powers, including the United States, China and Russia.
U.S. Defense Secretary Robert Gates, who says any military action against Iran would only "buy time" and stresses the need for diplomacy, mentioned possible new sanctions on banking and equipment and technology for Iran's oil and gas industry.
Iran's Foreign Ministry said there was no link between the missile manoeuvres and the country's nuclear activities.
"This is a military drill which is deterrent in nature," spokesman Hassan Qashqavi told a news conference broadcast by English-language Press TV. "There is no connection whatsoever with the nuclear programme."
Press TV said the Shahab 3, a surface-to-surface missile with a range of up to 2,000 km (1,250 miles), was "successfully" test-fired on the second day of an exercise that got under way on Sunday, when short and medium-range missiles were launched.
Such a range would put Israel and U.S. bases in the region within striking distance.
Television footage showed a missile soaring into the sky in desert-like terrain, to shouts of Allahu Akbar (God is Greatest).
"All targets within the region, no matter where they are, will be within the range of these missiles," General Hossein Salami, commander of the Guards' air force, said.
The United States and its Western allies have made clear they will focus on Iran's nuclear programme at the Geneva meeting. Iran has offered wide-ranging security talks but says it will not discuss its nuclear "rights".
Washington, which suspects Iran is seeking to build nuclear bombs, has previously expressed concern about Tehran's missile programme. Iran, a major oil producer, says its nuclear work is solely for peaceful power generation purposes.
The Pentagon chief told CNN he hoped the disclosure of the second facility would force Tehran to make concessions. "The Iranians are in a very bad spot now because of this deception, in terms of all of the great powers," Gates said.
"There obviously is the opportunity for severe additional sanctions. I think we have the time to make that work."
U.S. Secretary of State Hillary Clinton said Iran must present "convincing evidence" at the Geneva meeting.
"We are going to put them to the test on Oct. 1," Clinton told CBS' "Face the Nation. "They can open their entire system to the kind of extensive investigation that the facts call for."
Both interviews were taped before Iran test-fired missiles on Sunday to show it is prepared to head off military attacks by by foes like Israel or the United States.
Irab's state broadcaster IRIB said "upgraded" versions of Shahab 3 and another missile, Sejil, had been tested. Officials have earlier said Sejil has a range of close to 2,000 km (1,250 miles). They were powered by solid fuel, IRIB said.
Neither the United States nor its ally Israel have ruled out military action if diplomacy fails to resolve the nuclear row.
Iran has said it would respond to any attack by targeting U.S. interests in the region and Israel, as well as closing the Strait of Hormuz, a vital route for world oil supplies.
U.S. President Barack Obama said on Saturday the discovery of a secret nuclear plant in Iran showed a "disturbing pattern" of evasion by Tehran. He warned Iran on Friday it would face "sanctions that bite" unless it came clean.
Iran has rejected Western condemnations of the plant's construction, saying the facility near the holy city of Qom is legal and open to inspections by the U.N. nuclear watchdog.
"Nothing has been illegal. It has been absolutely based on law," Qashqavi, the Foreign Ministry spokesman, said. "All activities are transparent ... we are prepared to clarify other aspects."
Chief nuclear negotiator Saeed Jalili has urged the six powers -- the United States, China, Russia, France, Britain and Germany -- to adopt a "constructive approach to resolve mutual concerns during the October 1 meeting," Press TV said. (Reporting by Tehran and Washington bureaux; writing by Samia Nakhoul; editing by Dominic Evans)