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Iran threatened on Tuesday to stop the flow of oil through the Strait of Hormuz if it became the target of an oil export embargo over its nuclear ambitions, a move that could trigger military conflict with countries dependent on Gulf oil. "The Iranian navy will test several kinds of its missiles, including its long-range missiles, in the Persian Gulf on Saturday," Admiral Mahmoud Mousavi, deputy commander of the Iranian navy, told Fars news agency. During military drills in 2009, Iran test-fired its surface-to-surface Shahab-3 missile, said to be capable of reaching reach Israel and U.S. bases in the Middle East. Washington has expressed concern about Tehran's missiles, which include the Shahab-3 strategic intermediate range ballistic missile with a range of up to 1,000 km (625 miles), the Ghadr-1 with an estimated 1,600 km range and a Shahab-3 variant known as Sajjil-2 with a range of up to 2,400 km. Iran began a 10-day naval drill in the Gulf last Saturday to show its resolve to counter any attack by foes such as Israel or the United States. Iranian media have said the exercise differed from previous ones in terms of "the vastness of the area of action and the military equipment and tactics that are being employed." The United States and Israel have said they do not rule out military action against Iran if diplomacy fails to resolve a dispute over the country's nuclear program, which Tehran says is peaceful but which the West says is a cover to build a bomb. HURTING ECONOMY Iran has said it would respond to any attack by targeting U.S. interests in the region and Israel, as well as by closing the Strait of Hormuz. The U.S. Navy, whose Fifth Fleet is based in the Gulf island of Bahrain, said it would not accept any Iranian disruption of the flow of oil in the strategic waterway. "The firing of missiles is the final part of the navy drill," said Mousavi. "The final phase of the drill is to prepare the navy for confronting the enemy in war situations." Navy commander Rear Admiral Ali Rastegari also said "medium-range, short-range missiles and smart torpedoes" would be test-fired. Experts say Iran might be able to close the Hormuz Strait temporarily, but that such a move would damage its own economy. Tensions with the West have risen since the U.N. nuclear watchdog reported on November 8 that Iran appears to have worked on designing an atomic bomb and may still be pursuing research to that end. Iran denies this and says it needs nuclear technology to generate electricity to meet growing domestic demand. Tehran has been hit by four rounds of U.N. sanctions since 2006 as well as U.S. and European Union sanctions over its refusal to suspend sensitive nuclear work. Some analysts say sanctions on Iran's vital energy sector might push the clerical establishment to change its nuclear policy. Over 60 percent of state revenue is from crude exports and most of Iran's petrol imports are shipped through Hormuz. "Iranian leaders are worried about sanctions on oil exports ... That is why they are making such threats," said analyst Hossein Kazemi. "Sanctions on oil income will paralyze the country." The Islamic Republic's leadership has repeatedly brushed off the impact of sanctions on the oil-dependent economy. (Reporting by Parisa Hafezi; Editing by Alistair Lyon) World Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (1) jaham wrote: Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Advertise With Us Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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