Iran test-fires missiles in Gulf exercise

TEHRAN (Reuters) - Iran said on Monday it had successfully test-fired what it described as two long-range missiles, flexing its military muscle in the face of mounting Western pressure over its nuclear program.

The announcement came at the climax of 10 days of naval exercises in the Gulf, during which Tehran has warned it could shut the Strait of Hormuz, through which 40 percent of world oil is shipped, if sanctions were imposed on its crude exports.

Analysts say Iran's increasingly strident rhetoric, which has pushed oil prices higher, is aimed at sending a message to the West that it should think twice about the economic cost of putting further pressure on Tehran.

"We have successfully test-fired long-range shore-to-sea and surface-to-surface missiles, called Qader (Capable) and Nour (Light) today," Deputy Navy Commander Mahmoud Mousavi told state television.

Despite his use of the term 'long-range', the semi-official Fars news agency said the Qader's range was only 200 km (125 miles), and no figure was given for the Nour.

Iran is about 225 km (140 miles) at its nearest point from Bahrain, where the U.S. Fifth Fleet is based, and about 1,000 km (625 miles) from Israel. Its longest-range missile, the Sajjil-2, has a range of up to 2,400 km (1,500 miles).

Iran said on Monday it had no intention to close the Strait of Hormuz, but has carried out "mock" exercises on shutting it.

"No order has been given for the closure of the Strait of Hormuz. But we are prepared for various scenarios," state television quoted navy chief Habibollah Sayyari as saying.

The U.S. Fifth Fleet said it would not allow shipping to be disrupted in the strategic waterway.

Tehran denies Western accusations that it is trying to build atomic bombs, saying it needs nuclear technology to generate electricity.

The United States and Israel have not ruled out military action against Iran if diplomacy fails to resolve the Islamic state's nuclear row with the West.

ISRAELI REACTION

Israel played down the military impact of Iran's announcement, saying Tehran's forces were no match for the West's in the Gulf.

Moshe Yaalon, vice prime minister and minister of strategic affairs, told Israel Radio the exercises reflected Iran's concern about sanctions to curb its nuclear ambitions, and its efforts to suggest its naval forces could match those of the West, led by the United States, in the Gulf.

On that point, Yaalon was dismissive. "Really, this couldn't even be called a fair fight between the two sides." He repeated Israel's call for tougher economic sanctions against Iran accompanied by "a credible military option as a last resort."

The European Union is considering following the United States in banning imports of Iranian crude oil. U.S. President Barack Obama signed new sanctions against Iran into law on Saturday, stepping up the pressure with sanctions on financial institutions that deal with Iran's central bank.

If enforced strictly, the sanctions could make it nearly impossible for most refiners to buy crude from Iran, the world's fourth biggest producer.

The United Nations Security Council has already imposed four rounds of global sanctions on Iran over its refusal to halt sensitive nuclear activities.

Iran has so far shown no willingness to change its nuclear course but Iranian media reported on Saturday that nuclear negotiator Saeed Jalili would write to the EU foreign policy chief to say Tehran was ready for fresh talks on its nuclear program.

Talks between Iran and six world powers - the United States, Russia, China, Britain, France and Germany - stalled in January.

(Additional reporting by Hossein Jaseb in Tehran and Jeffrey Heller in Jerusalem; Editing by Mark Trevelyan)