Iran has successfully test fired a new short-range missile equipped with a guidance system it plans to install on all future missiles it builds, Defence Minister Ahmad Vahidi said on Saturday.
"With the fourth-generation of the Fateh 110, the armed forces of our country are able to target and destroy land and sea targets, enemy headquarters ... missile seats, ammunition sites, radars and other points," Vahidi said in quotes carried by Islamic Republic News Agency.
The Fateh 110 has a range of around 300 km (180 miles), IRNA reported, meaning it would only be able to strike Iran's immediate neighbours.
The announcement follows mounting tension over Iran's nuclear facilities, which the Islamic Republic says are geared solely towards electricity production, but which Western countries believe are aimed at developing an atomic bomb.
"Using new guidance methods, target-striking systems were installed on the missiles and during the flight test... its ability to hit the target without deviation was proven," Vahidi said according to IRNA.
"In future programmes all future missiles built by the Defence Ministry will be equipped with this capability," he added.
Iranian officials have threatened in the past to close the Strait of Hormuz, the neck of the Gulf through which 40 percent of the world's sea-borne oil exports pass, in retaliation for sanctions levied against its crude exports, or military action.
Such a move would risk a military response from the United States, which has built up its military presence in the Gulf.
Vahidi also said the missile was intended as a defensive weapon. "These capabilities are defensive and would only be used against aggressors and those who threaten the country's interests and territorial integrity," he said.