A newly inaugurated Iranian destroyer test fired a surface-to-surface missile in the Gulf today, Iran's Fars news agency reported. The Islamic Republic, embroiled in an escalating row with the West over its nuclear programme, often announces advances in its military capabilities and stages missile tests in an apparent bid to show its readiness to counterattack.

Neither Israel nor the United States have ruled out military action if diplomacy fails to resolve the dispute over atomic work the West fears is aimed at making bombs but which Tehran says is for peaceful power generation. Fars said the Jamaran destroyer, the first Iranian-built warship of its type, launched last month at a ceremony attended by Supreme Leader Ayatollah Ali Khamenei, successfully test fired the Nour (Light) missile.

"The destroyer's missile system was tested and the firing of the Nour surface-to-surface missile towards the intended target was successfully conducted," the semi-official news agency said. Much of Iran's naval equipment dates from before the 1979 Islamic revolution and is US made.

The United States said in January it had expanded missile defence systems in and around the Gulf - a waterway crucial for global oil supplies - to counter what it sees as Iran's growing missile threat. Iran condemned the move and accused Washington of seeking to stoke "Iran phobia". - Reuters