Iran's state media says the country has successfully test launched a mid-range surface-to-surface missile that can reach Israel, southeastern Europe and U.S. bases in the Middle East.
Iranian government TV showed what it said was the test-firing of the Sejil-2, which it says has a range of 2,000 kilometers.
Iranian President Mahmoud Ahmedinejad also commented on the test-firing of the two-stage missile during a campaign speech in the northern town of Semnan.
The crowd of several thousand Ahmedinejad supporters cheered as the president described the launch.
He says that Iran's Defense Minister informed him of the launch, and he claims that the missile is able to go beyond the atmosphere before coming back to hit its target.
Mr. Ahmadinejad has inflamed tensions with the West in the past with his threats to to wipe Israel "off the map." Israel has not ruled out military action on Iran's nuclear facilities.
The solid-fuel surface-to-surface missile is a new version of the Sejil that Iran said it had successfully tested in November.
The United States condemned the earlier test as a violation of U.N. Security Council resolutions.
Iranian Defense Minister Mohammad Mustafa Najjar indicated to Iranian TV back in November that the Sejil-2 missile had a range of around 2000 kilometers, which puts in striking distance of Israel.
Deputy Israeli Foreign Minister Danny Ayalon downplayed the importance of the new missile, but suggested that its range "should worry the Europeans," since a number of European states are now also within striking distance.
Ayalon also underlined that Iran is trying to develop a ballistic missile with a range of 10,000 kilometers that could reach the coast of the United States.
President Barack Obama indicated two days ago that the United States was ready to push for stronger international sanctions against Iran if Tehran refused to enter into negotiations over its nuclear program. The United States is also pushing for the installation of a missile defense program in Central Europe to guard against the threat posed by Iranian missiles.
Paul Ingram, executive director of the British American Security Information Council (BASIC), stresses that it's difficult to determine if the Sejil-2 test launch is a worrisome development, but that it sounds a lot like campaign rhetoric by President Ahmedinejad.
"It does sound like campaign rhetoric," Ingram said. "It is no coincidence that we are in the middle of an election campaign. Ahmedinejad has staked his domestic reputation on a position that has been to heighten tensions between Iran and the West. This current phase is very difficult to have any sort of cold analysis of the facts, because that is exactly what Ahmedinejad doesn't want. As with so many of these launches, the reality on the ground is so much less sensational than Ahmedinejad likes to whip up in these cases."
The United States and its Western allies accuse Iran of working to produce a nuclear weapon. U.S. President Barack Obama said Monday he hopes to see serious progress by the end of year in diplomatic initiatives to get Iran to stop its uranium enrichment activities. Iran says its atomic program is for producing electricity.