Iranian Defense Minister Ali Shamkhani said last week Iran was working to improve the range and accuracy of the Shahab-3 in response to Israel's moves to boost its anti-missile capability.
The Defense Ministry, in a brief statement carried on the official news agency IRNA, said the test of the new Shahab-3 "was carried out successfully ... The pre-determined targets were hit in the testing," it said.
Iran says its missile program is purely for deterrent purposes. Tehran also denies US and Israeli accusations that it is seeking to develop nuclear warheads which could be delivered by the Shahab-3.
In Washington, the State Department said Iran's attempts to improve its missile capability were a threat to the region and US interests.
"We will continue to take steps to address Iran's missile efforts, and to work closely with other like-minded countries in doing so," State Department spokesman Adam Ereli said.
Based on the North Korean Nodong-1 and modified with Russian technology, the Shahab-3 is thought to have a range of 810 miles, which would allow it to strike anywhere in Israel.
Shahab means meteor in Persian.
Amid media speculation that Israel may try to halt Iran's nuclear program by carrying out air strikes on some atomic facilities in Iran, Iranian officials have said Tehran would retaliate promptly and strongly to any such attack.
"If Israel behaves like a lunatic and attacks the Iranian nation's interests, we will come down on their heads like a mallet and break their bones," the ISNA students news agency quoted Revolutionary Guards Commander Yahya Rahim Safavi as saying on Wednesday.
Israel successfully tested its Arrow II anti-missile project in the United States last month. It was the seventh time the Arrow II had worked but the first time it had destroyed a Scud missile -- similar to the Shahab-3 -- in flight.
"The Israelis have recently tried to increase their missile capability and we will also try to upgrade our Shahab-3 missile in every respect," the ISNA students news agency quoted Shamkhani as saying last week.
He said the improvements to the Shahab-3 "will not be limited to the missile's range and will include all its specifications."
Iran deployed the Shahab-3 missiles to its Revolutionary Guards last July after preliminary field tests were successfully completed.
Iran has not said how many of the missiles have been manufactured. Military analysts say questions remain about its reliability and accuracy.
A senior Israeli defense source said Israel believed Tehran was developing a Shahab-4 missile with a range of 1,056 miles capable of reaching Europe. Iran has denied this.
"This 'new and improved' Shahab-3 could well be Iran's way of producing the extended-range missile while avoiding the Mark-4 label, which would draw international concern," he said.
(China Daily August 12, 2004)