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See more Images of May Follow Reuters Facebook Twitter RSS YouTube Read Barclays CEO Diamond quits over rate rigging | 12:28pm EDT Actor Andy Griffith dies in North Carolina 12:20pm EDT Iran says it test-fires missiles in war of nerves 12:35pm EDT Scorching heat roasts eastern United States | 12:34pm EDT Syrian army attacks rebels, Turkey scrambles F16s | 12:39pm EDT Discussed 235 Supreme Court to deliver Obama healthcare law ruling 105 Insight: ”Green Fleet” sails, meets stiff headwinds in Congress 85 Iran threatens Israel; new EU sanctions take force Watched U.S. Morning Call: Microsoft computes a $6.2 bln hit 7:52am EDT 3XSQ: Microsoft mistake, Chrysler gains 10:04am EDT Who'll replace Bob Diamond? 9:45am EDT Pictures Reuters Photojournalism Our day's top images, in-depth photo essays and offbeat slices of life. See the best of Reuters photography. See more | Photo caption Raging wildfires Raging fires strike Colorado and Utah. Slideshow Gay Pride parades Revelers celebrate Gay Pride month with parades all around the world. Slideshow Iran says it test-fires missiles in war of nerves Tweet Share this Email Print Related News Oil up sharply on supply fears, stimulus hope 11:54am EDT Oil slips on more signs of slowing economy Mon, Jul 2 2012 Iran drafts bill to block Hormuz for Gulf oil tankers Mon, Jul 2 2012 Iran threatens Israel; new EU sanctions take force Sun, Jul 1 2012 Iran vows to confront "malicious" embargo Sun, Jul 1 2012 Analysis & Opinion Hunting hogs What if Iran gets the bomb? Related Topics World » United Nations » Aerospace & Defense » Israel » A new medium-range missile is fired from a naval ship during Velayat-90 war game on Sea of Oman near the Strait of Hormuz in southern Iran January 1, 2012. Credit: Reuters/Jamejamonline/Ebrahim Norouzi By Marcus George DUBAI | Tue Jul 3, 2012 12:35pm EDT DUBAI (Reuters) - Iran said on Tuesday it had successfully tested medium-range missiles capable of hitting Israel as a response to threats of attack, the latest move in a war of nerves with the West. Israel says it could attack Iran if diplomacy fails to secure a halt to its disputed nuclear energy program. The United States also has military force as a possible option but has repeatedly encouraged the Israelis to be patient while new economic sanctions are implemented against Iran. The Islamic Republic announced the "Great Prophet 7" missile exercise on Sunday after a European embargo against Iranian crude oil purchases took full effect following another fruitless round of big power talks with Tehran. Iran's official English-language Press TV said the Shahab 3 missile with a range of 1,300 km (800 miles) - able to reach Israel - was tested along with the shorter-range Shahab 1 and 2. "The main aim of this drill is to demonstrate the Iranian nation's political resolve to defend vital values and national interests," Revolutionary Guards Deputy Commander Hossein Salami was quoted by Press TV as saying. He said the tests were in response to Iran's enemies who talk of a "military option being on the table". On Sunday, Iran threatened to wipe Israel "off the face of the earth" if the Jewish state attacked it. Analysts have challenged some of Iran's military assertions, saying it often exaggerates its capabilities. Senior researcher Pieter Wezeman of the Stockholm International Peace Research Institute said Iran's missiles were still relatively inaccurate and of limited use in conventional warfare. With conventional warheads, "their only utility is as a tool of terror and no more than that", he said by telephone. He added, however, that they could be suitable for carrying nuclear warheads, especially the larger ones. The International Institute for Strategic Studies, said in a 2010 report that all Tehran's ballistic missiles were "inherently capable of a nuclear payload", if Iran was able to make a small enough bomb. Iran denies Western accusations that it is seeking to develop nuclear weapons capability. The world's No. 5 oil exporter maintains that it is enriching uranium only to generate more energy for a rapidly growing population. OIL MARKETS ON EDGE Iran has previously threatened to block the Strait of Hormuz, through which more than a third of the world's seaborne oil trade passes, in response to increasingly harsh sanctions by the United States and its allies intended to force it to curb its nuclear research program. Fars said dozens of missiles involved in this week's exercises had been aimed at simulated air bases, and that Iranian-built unmanned drones would be tested on Wednesday. Iran repeated its claim to be reverse-engineering the sophisticated U.S. RQ-170 drone that it says it brought down during a spying mission last year. "In this drone there are hundreds of technologies used, each of which are valuable to us in terms of operations, information and technicalities," General Amir Hajizadeh was quoted by the ISNA news agency as saying. Wezeman said Iran had a large standing armed force, but that its weapons were generally outdated. "And those weapons only get older and older and they don't have access to new technology because they are under a United Nations arms embargo." In his first comments since the European Union oil ban took force, President Mahmoud Ahmadinejad said sanctions would benefit Iran by lessening its dependence on crude exports. "We must see the sanctions as an opportunity ... which can forever take out of the enemy's hands the ability to use oil as a weapon for sanctions," Fars news agency quoted him as saying. Negotiations over Iran's nuclear program continued in Istanbul on Tuesday with a meeting of technical experts from Iran and six world powers. The discussions follow a round of political talks in Moscow last month at which the sides failed to bridge differences or agree on a further round of talks at that level. The experts have no mandate to strike agreements but the six powers - the United States, China, Britain, Germany, France and Russia - hope that by clarifying technical aspects of Tehran's work they can open way for more negotiations in the future. "We hope Iran will seize the opportunity of this meeting to show a willingness to take concrete steps to urgently meet the concerns of the international community," EU foreign policy chief Catherine Ashton said ahead of the meeting. As a priority, the powers want Iran to stop enriching uranium to levels close to weapons-grade, ship out any stockpile, and close a secret facility where such work is done. Iran denies its program has a military dimension and wants relief from economic sanctions before it makes any concessions. IRANIAN CALL TO SHUT OIL LANES On Monday, Iranian parliamentarians proposed a bill calling for Iran to try to stop tankers taking crude through the Strait of Hormuz to countries that support the sanctions. However, the Iranian parliament is relatively weak, analysts say, and the proposal has no chance of becoming law unless sanctioned by Iran's clerical supreme leader. That is seen as unlikely in the near term given that Western powers have said they would tolerate no closure of the Strait while Iranian leaders, wedded to strategic pragmatism for the sake of survival, have said they seek no war with anyone. "It's a gesture at this stage," said independent British-based Iran analyst Reza Esfandiari. "They want to emphasize that Iran can make life difficult for Europe and America. I think this is more of an attempt to offset falling crude prices. Financial markets are very sensitive to such talk." On Tuesday, the price of Brent crude, which has been on a downward trend for the last three months, broke $100 for the first time since early June. "A lot depends on nuclear talks," said Esfandiari. "If there's no progress and the initiative is deadlocked, then these kind of actions will intensify." (Additional reporting by Yeganeh Torbati in Dubai, Fredrik Dahl in Vienna and Justyna Pawlak in Brussels; Editing by Mark Heinrich and Kevin Liffey) World United Nations Aerospace & Defense Israel 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 (13) boreal 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 Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use AdChoices Copyright 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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