Iran test-fired on Monday a missile which defence analysts have said could hit Israel and US bases in the Gulf region, state television reported.
It said the surface-to-surface Shahab 3 missile was tested during missile manoeuvres by the elite Revolutionary Guards that got under way on Sunday.
Iranian officials have said the Shahab 3, which was last tested in mid-2008, can travel about 2,000 km.
The manoeuvres coincide with increased tension in Iran's nuclear dispute with the West, after last week's disclosure by Tehran that it is building a second uranium enrichment plant.
News of the nuclear fuel facility south of Tehran added a sense of urgency to a crucial meeting in Geneva on Thursday between Iranian officials and representatives of six major powers, including the United States, China and Russia.
State Press TV, Iran's English-language satellite channel, said the Guards had also test-fired Shahab 1 and 2 missiles with a range of between 300 and 700 km.
'Iran has successfully test-fired medium-range Shahab missiles with multiple warheads,' Press TV said, adding the drill was aimed at 'boosting the armed forces' deterrent capabilities'.
Iran conducts war games or tests weapons to show its resolve to counter any attack by foes like Israel or the United States.
'Iran flexes muscles ... The tests are likely to be seen as an act of defiance by Iran,' daily Iran News said.
The United States, which suspects Iran is seeking to build nuclear bombs, has previously expressed concern about Tehran's missile programme. Iran says its nuclear work is solely for peaceful power generation purposes.
Neither the United States nor its ally Israel have ruled out military action if diplomacy fails to resolve the nuclear row.
Iran has said it would respond to any attack by targeting US interests in the region and Israel, as well as closing the Strait of Hormuz, a vital route for world oil supplies.
US President Barack Obama said on Saturday the discovery of a secret nuclear plant in Iran showed a 'disturbing pattern' of evasion by Tehran. He warned Iran on Friday it would face 'sanctions that bite' unless it came clean.
US Defense Secretary Robert Gates, who says any military action against Iran would only 'buy time' and stresses the need for diplomacy, told CNN he hoped the disclosure of the second facility would force Tehran to make concessions.
Iranian officials have rejected Western condemnations of the plant's construction, saying the facility near the holy city of Qom is legal and open to inspections by the UN nuclear watchdog.
The United States and its Western allies have made clear they will focus on Iran's nuclear programme during this week's meeting in Switzerland. Iran has offered wide-ranging security talks but says it will not discuss its nuclear 'rights'.
Chief nuclear negotiator Saeed Jalili has urged the six powers -- the United States, China, Russia, France, Britain and Germany -- to adopt a 'constructive approach to resolve mutual concerns during the October 1 meeting,' Press TV said.