* Iran conducts missile tests after EU oil embargo starts
* Shabab-3 missile said to have range to hit Israel
* Tehran vows to defend itself against military threats
* Technical talks held in Istanbul on nuclear programme
(Adds details of Istanbul talks)
By Marcus George
DUBAI, July 3 Iran said on Tuesday it had
successfully tested medium-range missiles capable of hitting
Israel as a response to threats of attack, the latest move in a
war of nerves with the West.
Israel says it could attack Iran if diplomacy fails to
secure a halt to its disputed nuclear energy programme. The
United States also has military force as a possible option but
has repeatedly encouraged the Israelis to be patient while new
economic sanctions are implemented against Iran.
The Islamic Republic announced the "Great Prophet 7" missile
exercise on Sunday after a European embargo against Iranian
crude oil purchases took full effect following another fruitless
round of big power talks with Tehran.
Iran's official English-language Press TV said the Shahab 3
missile with a range of 1,300 km (800 miles) - able to reach
Israel - was tested along with the shorter-range Shahab 1 and 2.
"The main aim of this drill is to demonstrate the Iranian
nation's political resolve to defend vital values and national
interests," Revolutionary Guards Deputy Commander Hossein Salami
was quoted by Press TV as saying.
He said the tests were in response to Iran's enemies who
talk of a "military option being on the table".
On Sunday, Iran threatened to wipe Israel "off the face of
the earth" if the Jewish state attacked it.
Analysts have challenged some of Iran's military assertions,
saying it often exaggerates its capabilities.
Senior researcher Pieter Wezeman of the Stockholm
International Peace Research Institute said Iran's missiles were
still relatively inaccurate and of limited use in conventional
warfare. With conventional warheads, "their only utility is as a
tool of terror and no more than that", he said by telephone.
He added, however, that they could be suitable for carrying
nuclear warheads, especially the larger ones.
The International Institute for Strategic Studies, said in a
2010 report that all Tehran's ballistic missiles were
"inherently capable of a nuclear payload", if Iran was able to
make a small enough bomb.
Iran denies Western accusations that it is seeking to
develop nuclear weapons capability. The world's No. 5 oil
exporter maintains that it is enriching uranium only to generate
more energy for a rapidly growing population.
OIL MARKETS ON EDGE
Iran has previously threatened to block the Strait of
Hormuz, through which more than a third of the world's seaborne
oil trade passes, in response to increasingly harsh sanctions by
the United States and its allies intended to force it to curb
its nuclear research programme.
Fars said dozens of missiles involved in this week's
exercises had been aimed at simulated air bases, and that
Iranian-built unmanned drones would be tested on Wednesday.
Iran repeated its claim to be reverse-engineering the
sophisticated U.S. RQ-170 drone that it says it brought down
during a spying mission last year.
"In this drone there are hundreds of technologies used, each
of which are valuable to us in terms of operations, information
and technicalities," General Amir Hajizadeh was quoted by the
ISNA news agency as saying.
Wezeman said Iran had a large standing armed force, but that
its weapons were generally outdated. "And those weapons only get
older and older and they don't have access to new technology
because they are under a United Nations arms embargo."
In his first comments since the European Union oil ban took
force, President Mahmoud Ahmadinejad said sanctions would
benefit Iran by lessening its dependence on crude exports.
"We must see the sanctions as an opportunity ... which can
forever take out of the enemy's hands the ability to use oil as
a weapon for sanctions," Fars news agency quoted him as saying.
Negotiations over Iran's nuclear programme continued in
Istanbul on Tuesday with a meeting of technical experts from
Iran and six world powers.
The discussions follow a round of political talks in Moscow
last month at which the sides failed to bridge differences or
agree on a further round of talks at that level.
The experts have no mandate to strike agreements but the six
powers - the United States, China, Britain, Germany, France and
Russia - hope that by clarifying technical aspects of Tehran's
work they can open way for more negotiations in the future.
Diplomats in Istanbul said discussions were "detailed" and
would most likely be followed by a meeting between a senior
negotiator from the European Union and Iran's deputy negotiator
Ali Bagheri. Such a meeting could, at a later date, be a prelude
to talks on a political level, diplomats have said.
"We hope Iran will seize the opportunity ... to show a
willingness to take concrete steps to urgently meet the concerns
of the international community," EU foreign policy chief
Catherine Ashton said ahead of the meeting. Ashton and her team
represent the six powers in dealings with Iran.
As a priority, the powers want Iran to stop enriching
uranium to levels close to weapons-grade, ship out any
stockpile, and close a secret facility where such work is done.
Iran denies its programme has a military dimension and wants
relief from economic sanctions before it makes any concessions.
IRANIAN CALL TO SHUT OIL LANES
On Monday, Iranian parliamentarians proposed a bill calling
for Iran to try to stop tankers taking crude through the Strait
of Hormuz to countries that support the sanctions.
However, the Iranian parliament is relatively weak, analysts
say, and the proposal has no chance of becoming law unless
sanctioned by Iran's clerical supreme leader.
That is seen as unlikely in the near term given that Western
powers have said they would tolerate no closure of the Strait
while Iranian leaders, wedded to strategic pragmatism for the
sake of survival, have said they seek no war with anyone.
"It's a gesture at this stage," said independent
British-based Iran analyst Reza Esfandiari.
"They want to emphasise that Iran can make life difficult
for Europe and America. I think this is more of an attempt to
offset falling crude prices. Financial markets are very
sensitive to such talk."
On Tuesday, the price of Brent crude, which has been on a
downward trend for the last three months, broke $100 for the
first time since early June.
"A lot depends on nuclear talks," said Esfandiari. "If
there's no progress and the initiative is deadlocked, then these
kind of actions will intensify."
(Additional reporting by Yeganeh Torbati in Dubai, Fredrik Dahl
in Vienna and Justyna Pawlak in Brussels; Editing by Mark
Heinrich, Kevin Liffey and Michael Roddy)