Iran tests more missiles as U.S. vows to defend allies

By Alistair Lyon

TEHRAN (Reuters) - Iran tested more missiles in the Gulf on Thursday, state media said, and the United States reminded Tehran that it was ready to defend its allies.

The United States, which accuses Tehran of seeking nuclear arms, said after Iran test-fired nine missiles on Wednesday that there should be no more such tests if Iran wanted the world's trust. An intelligence official in Washington said there had been a second test and that it was small.

U.S. leaders have not ruled out military options if diplomacy fails to assuage fears about Iran's nuclear program, which Tehran says is only to produce electricity.

Israel, which has long been assumed to have its own atomic arsenal, has sworn to prevent Iran from emerging as a nuclear-armed power. Last month it staged an air force exercise that stoked speculation about a possible assault on Iranian nuclear sites.

Israeli Defense Minister Ehud Barak said he favored diplomatic pressure and sanctions, but: "Israel is the strongest country in the region and has proved in the past it is not afraid to take action when its vital security interests are at stake."

Iran, the world's fourth largest oil producer, has vowed to strike back at Tel Aviv, as well as U.S. interests and shipping, if it is attacked, asserting that missiles fired during war games in the Gulf included some that could hit Israel and U.S. bases in the region.

U.S. Secretary of State Condoleezza Rice said on a visit to the former Soviet republic of Georgia that no one should doubt Washington's commitment to protect its allies.

"We are also sending a message to Iran that we will defend American interests and ... the interests of our allies," she said.

Rice said a planned U.S. missile defense shield, to be partly based in the Czech Republic and Poland, would dampen any threat of an attack from Iran. Russia opposes the project.

Iranian state TV and radio said the Revolutionary Guards -- the ideologically driven wing of Iran's armed forces -- had fired ground-to-sea, surface-to-surface and sea-to-air missiles overnight. Long-range missiles were also launched.

"The ... maneuver brings power to the Islamic Republic of Iran and is a lesson for enemies," Guards Commander-in-Chief Mohammad Ali Jafari was quoted as saying.

OIL

The missile tests have rattled global oil markets. In late afternoon trading, oil prices surged $6, with some traders talking of a potential third missile test. Crude prices have hit a series of record highs this year partly over Iran.

The U.S. intelligence official, who spoke on condition of anonymity, said there had been no information to substantiate a rumor of a third test. She said the United States was still investigating details of the second launch.

"What we were seeing here is there was a round of tests first, then later in the day, Wednesday Iran time, there was a much smaller second test," she said.