Iran test-fires long-range missiles in Gulf

"We have successfully test-fired long-range shore-to-sea and surface-to-surface missiles," Deputy Navy Commander Mahmoud Mousavi told state television.

The announcement may be intended to demonstrate that Iran, if attacked, can hit Israel and US bases in the region. The US Fifth Fleet is based on the opposite side of the Persian Gulf to Iran, in Bahrain.

Iran began a 10-day naval drill in the Gulf last week. warning that it could shut the Strait of Hormuz if sanctions are imposed on its oil exports.

Iran says it has no intention of closing the strait but that it is "prepared for varous scenarios". 40 per cent of the world's oil passes through the strait, a narrow Gulf shipping lane.

On Saturday US President Barack Obama signed new sanctions against Iran which, if enforced strictly, would make it very difficult for refiners to buy crude from Iran, the world's fourth biggest oil producer.

The United Nations has imposed a range of sanctions on Iran since 2006 amid fears that Tehran is enriching uranium with a view to building atomic bombs. In addition, the United States, which does not have diplomatic relations with Iran, has imposed its own bilateral sanctions.

In November 2011 the UK ordered all British credit and financial institutions to stop trading with Iranian banks after a UN report suggested Tehran was involved in nuclear weapons production. Iran says it needs nuclear technology to generate electricity.