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The White House warned on Wednesday that Iran was running out of time to head off international sanctions for not complying with the West's demands over its nuclear program.

White House spokesman Robert Gibbs said Iran still had time to live up to its international obligations and that "if they don't, time will run out" and Western powers will move to the "next step."

His comments came after another White House spokesman, Mike Hammer, said that Iran's test of an upgraded missile undermines the Islamic Republic's insistence of peaceful intentions and would be looked upon seriously by the world.

"At a time when the international community has offered Iran opportunities to begin to build trust and confidence, Iran's missile tests only undermine Iran's claims of peaceful intentions," he said.

Iran state television announced earlier Wednesday that the Islamic Republic had successfully test-fired the Sejil-2 missile, whose range outstrips the Shahab, a missile said to be capable of striking Israel and U.S. bases in the Gulf.

Hammer added: "Such actions will increase the seriousness and resolve of the international community to hold Iran accountable for its continued defiance of its international obligations on its nuclear program."

Following the Iranian television report, British Prime Minister Gordon Brown said the launch underlined the case for tougher sanctions against Tehran.

The Sejil-2 missile is Iran's most advanced two-stage surface-to-surface missile and is powered entirely by solid fuel while the older Shahab-3 uses a combination of solid and liquid fuel in its most advanced form, which is also known as the Qadr-F1.

Al Alam, Iran's Arabic-language satellite television, said the Sejil missile had a longer range than the Shahab missile, which Iranian officials in the past have said can reach targets 2,000 km (1,250 miles) away, which would put Israel and U.S. bases in the Gulf within reach.

The missile test coincided with increased tension over Iran's nuclear program, which the West fears is aimed at making bombs. Iran denies the charge.

Neither Israel nor the United States have ruled out military action if diplomacy fails to resolve the row. Iran has vowed to retaliate for any attack.

State television showed a missile launched from desert-like terrain soaring into the sky with a long vapor trail. Press TV, Iran's English-language television station, said of the test: "The missile hit its target."

"Iran successfully tests optimized version of Sejil 2 missile," it said in a breaking news headline.

Republican congressman Eric Cantor also condemned Iran's missile test on Wednesday, saying it presents danger to U.S. national security interests.

"The world's largest state-sponsor of terrorism now is closer to having a deliverable nuclear weapon. Should that day come, global stability and efforts to combat nuclear proliferation will be permanently compromised," he warned.

Credit Suisse to pay $536m for violating sanctions

Meanwhile, U.S. prosecutors said on Wednesday that Swiss banking giant Credit Suisse Group AG would pay $536 million for violating U.S. law by conducting business with Iran and other sanctioned countries.

Documents filed in federal court in Washington said Credit Suisse moved more than $1.6 billion through the U.S. financial system on behalf of Iran, Sudan, Myanmar, Cuba and Libya.

The documents outlined the violations and the settlement, known as a deferred prosecution agreement, which ended a five-year investigation by U.S. authorities.

According to the court documents, the Swiss bank may have begun evading U.S. sanctions as early as 1986, when sanctions on Libya were first imposed.

The bank was specifically charged with "knowingly and willfully" attempting to violate regulations issued under the International Emergency Economic Powers Act from mid-1995 through about 2006.

Credit Suisse's "internal communications showed a continuous dialogue about evading U.S. sanctions spanning approximately a decade," the documents alleged.

In a statement, Credit Suisse said it was committed to the highest standards of integrity and took "this matter extremely seriously." It said it had carried out a investigation and ended business with the sanctioned countries by 2007.