Iran faces world criticism over 'provocative' missile test after it fires a weapon which could strike Israel

The warhead exercise was carried out at the mouth of the Strait of Hormuz, the route for about 40 per cent of the world's oil.

Iran has threatened to shut down shipping in the strait if it is attacked. Oil prices jumped on the news of the tests.

An Iranian Shahab-3 missile: The long-ranged ballistic missle rises into the air after being test-fired at an undisclosed location in the Iranian desert

TV footage showed at least six missiles firing simultaneously. Officials in Tehran claimed the barrage included a new version of the Shahab-3 missile, which has a range of 1,250 miles. 

That would put Israel, Turkey, the Arabian peninsula, Afghanistan and Pakistan within striking distance.

The show of force dominated campaigning in the race for the U.S. presidency.

John McCain, the Republican candidate, said the tests 'demonstrate the need for effective missile defence now and in the future'.

He added: 'Working with our European and regional allies is the best way to meet the threat posed by Iran, not unilateral concessions that undermine multilateral diplomacy.'

Defensive? Four long and medium range missiles rise into the air after being test-fired

The missile tests came the day after the U.S. signed a pact to build part of a missile shield in the Czech Republic.

The Bush administration also wants to install defence facilities in Poland to help counter Iran's nuclear ambitions. 

Barack Obama, Mr McCain's Democratic rival, demanded tighter economic sanctions against Tehran, calling the regime a 'great threat'.

'You have nothing to fear but fear itself... and inflation, house prices, bank failures, unemployment, car taxes, Abu Qatada and of course a rocket from Iran...'

He claimed President Bush has not backed up his confrontational rhetoric with economic action and said U.S. exports to Iran had increased over the past seven years.

'What this underscores is the need for us to create a kind of policy that is putting the burden on Iran to change behaviour, and frankly we just have not been able to do that over the last several years,' said Mr Obama.

Earlier, General Hossein Salami, the air force commander of Iran's elite Revolutionary Guard, had said: 'Our hands are always on the trigger and our missiles are ready for launch.'

He claimed the exercise demonstrated 'resolve and might against enemies who in recent weeks have threatened Iran with harsh language'.

The Iranian tests were said to be in response to a large Israeli military exercise last month when warplanes were sent over the eastern Mediterranean in a possible rehearsal for a strike on Tehran's nuclear facilities.

The West fears these are aimed at producing atomic weapons. Speaking in Bulgaria, Condoleezza Rice, the U.S. Secretary of State, called yesterday's tests 'evidence that the missile threat is not an imaginary one'.

Mr McCain came under fire last night over a joke about killing Iranians with cigarettes.

He had reacted to a report of rising U.S. cigarette exports to the country by saying it may be 'a way of killing 'em'.

Long-range danger: A Shahab-3 like the one test fired on Wednesday morning