Nine missiles were reported fired in the tests at a secret location in the Iranian desert, according to Iranian television which broadcast footage of the plumes of smoke left following the launches.
The launch included a reportedly improved Shahab-3 missile, which officials said could reach targets up to 1,250 miles away, as well as the 100-mile-range Fateh and the medium-range Zelzal which can reach 125-250 miles.
"The aim of these war games is to show we are ready to defend the integrity of the Iranian nation," Hossein Salami, air force commander of the Revolutionary Guard, was quoted as saying by state-run television Al-Alam.
"Our missiles are ready for shooting at any place and any time, quickly and with accuracy. The enemy must not repeat its mistakes. The enemy targets are under surveillance."
"Our hands are always on the trigger and our missiles are ready for launch."
The tests follow a exercises by the Israeli air force, reported by United States intelligence officials to be a "dry run" for an attack nuclear sites inside Iran.
Exercises were also conducted this week by the US Fifth Fleet, aided by British and Gulf forces, as preparation to protect key petroleum installations in the Gulf in case of conflict.
Iran has threatened to shut down the Strait of Hormuz, critical for shipments of much of the world's oil and gas supply, if it is attacked.
The test-firing was condemned by the US, where White House spokesman Gordon Johndroe said: "Iran's development of ballistic missiles is completely inconsistent with Iran's obligations to the world."
It has also raised alarm in Israel, where many are convinced sanctions are ineffective and calls are mounting for a strike on Iran before its nuclear ambitions reach a point of no return.
With US President George W Bush seemingly reluctant to turn to military action, Israel mounted a major training drill over the Mediterranean last month and is thought to be weighing a solo mission.
The heightened tensions come as Israel's security cabinet today prepares to discuss Hizbollah's rearming in southern Lebanon, despite the presence of Unifil troops.
Though Israel has restarted indirect peace talks with Syria, has expressed interest in the same with Lebanon, it also accuses Syria of helping to smuggle weapons to the Iranian-backed Lebanese militia.
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