Iran's elite Revolutionary Guards successfully has test-fired a land-to-sea missile with a range of about 350 kilometres (210 miles).
The firing came on the second day of war games by the Guards' air force and naval divisions amid mounting tensions with the West over Iran's nuclear programme, state television reported.
"We have successfully test fired a cruise missile called SSN4, or Raad, hitting targets 300 kilometres (180 miles) away in the Sea of Oman and northern Indian Ocean," deputy air force commander, Ali Fadavi was quoted as saying Thursday.
"This missile has the final range of 350 kilometres and can hit all kinds of big warships in all of the Persian Gulf, Sea of Oman and northern Indian Ocean.
"It can carry a 500 kilo (1,100 pounds) warhead and can fly at low altitude, evading radar jammings and immune to electronic measures."
Iranian television showed footage of the missile being fired and hitting its target.
In January 2004, then defence minister Ali Shamkhani said Tehran would proceed with production of a new line of Raad missiles to be deployed in the Gulf region.
The Guards on Wednesday successfully test-fired a new Russian-made air defence missile system, whose delivery last month sparked bitter US criticism.
TOR-M1 surface-to-air missiles were shown being fired from mobile vehicle launchers and successfully taking out their targets.
In 2005, Tehran and Moscow signed a contract for the purchase of 29 TOR-M1 missile systems estimated to be worth 700 million dollars (540 million euros).
The United States had urged Russia to cancel the sale, saying it was a mistake when the UN Security Council had imposed sanctions against Iran's ballistic missile industry as part of measures against its nuclear drive.
Iran's leaders have repeatedly said the country's armed forces are ready for any eventuality in the current standoff with the West over its nuclear programme.
Although the United States has said it wants the standoff solved through diplomacy, Washington has never ruled out military action to thwart Iran's atomic drive.
The United States accuses Iran of seeking a nuclear weapon. Tehran vehemently denied that, insisting its atomic programme is peaceful in nature.