Iran test fires missiles said to be capable of hitting Israel

Iran test-fired nine missiles on Wednesday and warned the United States and Israel it was ready to retaliate for any attack over its disputed nuclear projects.

Washington, which says Iran seeks atomic bombs, told Tehran to halt further tests. Iran, the world's fourth largest oil producer, says its nuclear program is only for electricity.

Iran later announced night-time missile maneuver, and its missile tests rattled oil markets, helping crude prices to rebound about $2 a barrel after recent falls.

Speculation that Israel could bomb Iran has mounted since a big Israeliair drill last month. U.S. leaders have not ruled out military options if diplomacy fails to end the nuclear row.

Revolutionary Guards air force commander Hossein Salami said in televized comments that thousands of missiles were ready to be fired at "pre-determined targets." Missiles were shown soaring from desert launchpads, leaving long vapour trails.

"Our hands are always on the trigger and our missiles are ready for launch," the official IRNA news agency quoted Salami as saying Wednesday.

"We warn the enemies who intend to threaten us with military exercises and empty psychological operations that our hand will always be on the trigger and our missiles will always be ready to launch," he said, according to ISNA news agency.

"Another night missile maneuver is taking place right now," Salami told state television later. He did not elaborate.

Wednesday's war games were being conducted at the mouth of the Strait of Hormuz, a strategic waterway where about 40 percent of the world's oil passes through.

The report showed footage of at least three missiles firing simultaneously, and said the barrage included a new version of the Shahab-3 missile, which officials have said has a range of 1,250 miles (2,000 kilometers) and is armed with a 1-ton conventional warhead.

That would put Israel, Turkey, the Arabian peninsula, Afghanistan and Pakistan within striking distance.

The White House told Iran to "refrain from further missile tests if they truly seek to gain the trust of the world."

But the United States gave no hint to leaders of a Group of Eight rich nations meeting in Japan this week that it planned to attack Iran, Italian Prime Minister Silvio Berlusconi said.

In Washington, U.S. Secretary of Defense Robert Gates, asked if the United States was any closer to confrontation with Iran, told reporters: "No, I don't think so."

Another senior U.S. official said the Bush administration had not exhausted the use of diplomacy to try to convince Iran to rein in its nuclear program.

"We view force as an option that is on the table but a last resort," U.S. Under Secretary of State for Political Affairs, William Burns, said.

Burns also told a Congressional panel that Iran had made only "modest" progress in its nuclear program because of U.N. sanctions, while warning Tehran that it would pay dearly if it pursued its current course.

"It is apparent that Iran has not yet perfected enrichment (of uranium), and as a direct result of U.N. sanctions, Iran's ability to procure technology or items of significance to its missile programs ... is being impaired," he said.

U.S. Secretary of State Condoleezza Rice suggested the tests justified U.S. plans for an anti-missile shield with bases in eastern Europe, which Russia firmly opposes.

"Those who say that there is no Iranian threat against which to be building missile defenses perhaps ought to talk to the Iranians about ... the range of the missiles that they test fired," Rice said in Bulgaria.

France, Germany and Italy joined criticism of Iran.

"These are very dangerous missiles - that's why the international community and not just Israel has an interest in blocking this escalation in a definitive way," Italian Foreign Minister Franco Frattini said in Ramallah, in the West Bank.

France said the tests heightened international concerns, while Germany voiced regret that Iran had responded to an offer of incentives by world powers with a "gesture of ill will."

U.S. Democratic presidential candidate Barack Obama called Iran a "great threat" and called for cooperation with allies to tighten pressure on Tehran. His Republican opponent John McCain voiced support for the missile shield to counter Iran.

Israel, believed to be the Middle East's only nuclear-armed power, has vowed to prevent Iran from acquiring an atomic bomb.

"Israel does not threaten Iran, but the Iranian nuclear program, combined with their aggressive ballistic missile programme, is a matter of grave concern," Mark Regev, spokesman for Prime Minister Ehud Olmert, said after the tests.

World powers have offered Iran incentives if it suspends uranium enrichment, a demand rejected by Tehran.

Commenting on Iran's response last week to that offer, Burns told the Congressional panel: "Iran is interested in trying to find common ground ... We will see if the Iranians are serious."

Iran has threatened to close the Strait of Hormuz, conduit for about 40 percent of globally traded oil, if it is attacked. The U.S. military saysit will prevent any such action.

The war of words heightens risks that a misunderstanding or a minor clash in the Gulf, for instance, could get out of hand.

Analysts say Iran's military technology often involves improving weaponry originating in China and North Korea.

"They are some way away yet from threatening Israel or U.S. bases," said London-based independent analyst Paul Beaver, noting that guidance systems over longer ranges needed work.

For months, Ahmadinejad and other Iranian officials have said they don't believe the U.S. will attack because of its difficulties in Iraq, domestic worries and concerns over the fallout in the region. At the same time, Tehran has stepped up its warnings of retaliation if the Americans - or Israelis - do attack it, including threats to hit Israel and U.S. Gulf bases with missiles and stop oil traffic through the vital Gulf region.

In late June, then commander of the U.S. Navy's 5th Fleet said any attempt by Iran to seal off the Strait of Hormuz would be viewed as an act of war. The U.S. 5th Fleet is based in Bahrain, across the Gulf from Iran.

Israel's military sent warplanes over the eastern Mediterranean for a large military exercise in June, which U.S. officials described as a possible rehearsal for a strike on Iran's nuclear facilities.

The Israeli exercise was widely interpreted as a show of force as well as a practice on skills needed to execute a long-range strike mission.

Transportation Minister and former IDF chief of staff Shaul Mofaz set off an international uproar last month by saying in a published interview that Israel would have no choice but to attack Iran if it doesn't halt its nuclear program. Mofaz is a former military chief and defense minister, and has been Israel's representative in a strategic dialogue on Iran with U.S. officials.

Meanwhile, a senior Iranian official said Wednesday that Tehran expects talks on its disputed nuclear program to begin within days.

"Now the West has accepted to start negotiations with Iran and this is the best way," Mohammad Saeedi said when asked about possible talks with European Union foreign policy chief Javier Solana. "Our diplomacy is based on negotiations."

Saeedi, deputy head of Iran's Atomic Energy Organisation, was quoted by Fars news agency as saying: "Talks will start in the next few days and at that time many issues will become clear."

Fars later said Solana was expected to travel to Iran on July 19. The agency did not cite a source for that report.

Solana is acting as envoy for six world powers which have offered Iran nuclear, trade and other incentives to coax it into halting sensitive nuclear activities.