Iran said on Sunday it had developed weapons systems to intercept stealth cruise missiles, state-run Press TV reported.

Israel and the United States have not ruled out possible military action if diplomatic efforts fail to curb an Iranian nuclear program the West suspects could yield atomic weapons. Iran insists it seeks only to generate electrical power.

"The Iranian air force has managed to build tens of anti-aircraft batteries and missile systems in addition to sophisticated radar systems," said General Ahmad Miqani, an air defense commander, quoted by Iran's English-language satellite news network.

"Today, the military is able to both detect stealth cruise missiles and destroy them," the television quoted Miqani as saying. He gave no further details.

Cruise missiles are designed to fly low to their targets, hugging the contours of the land to avoid radar.

The Iranian announcement came hours after the Sunday Times reported that a ship hijacked in the English Channel was carrying advanced Russian anti-aircraft missiles to Iran and had been tracked by Israel.

The Sunday Times quoted sources in Russia and Israel as saying that Mossad, Israel's intelligence agency, tracked the vessel and later tipped off Moscow that its cargo had been sold by former Russian military officers linked to the Russian underworld.

The Arctic Sea, which set sail from Finland on July 21 with 15 Russian crew members and a cargo of timber, failed to arrive in Algeria on August 4 as scheduled. The ship's signal had disappeared in the Atlantic in late July.

Russia sent naval vessels August 12 to search for the ship in the Atlantic Ocean. Days later, the government said it had found the Arctic Sea off West Africa and arrested eight hijackers.

But this version of events has been challenged by a number of sources.

Military officials believe a "cover story" was concocted, The Sunday Times reported, since any evidence that the Kremlin had let advanced weaponry fall into the hands of criminals or be sold to Iran would be highly embarrassing.

"The official version is ridiculous and was given to allow the Kremlin to save face," the British paper quoted a Russian military source as saying.

"I've spoken to people close to the investigation and they've pretty much confirmed Mossad's involvement. It's laughable to believe all this fuss was over a load of timber. I'm not alone in believing that it was carrying weapons to Iran."

The Sunday Times quoted the sources in Jerusalem and Moscow as claiming the ship actually had been loaded with S-300 missiles, Russia's most advanced anti-aircraft weapon, while undergoing repairs in the Russian port of Kaliningrad.