Iranian TV shows what Tehran says is a successfully launch
Iran says it has successfully test launched a mid-range surface-to-surface missile, state media have reported.
President Mahmoud Ahmadinejad said the Sajjil-2 missile used "advanced technology" and had landed on target.
He was speaking in Semnan, from where the missile, with a range of 2,000km (1,240 miles), was reportedly launched.
The US confirmed the launch had taken place, and reiterated that President Barack Obama was "concerned" about Iran's missile development.
Analysts say the test may be seen as provocative by Iran's Arab neighbours and its opponents in the West.
"The defence minister [Mohammed Najjar] told me today that we launched a Sajjil-2 missile, which is a two-stage missile and it has reached the intended target," Mr Ahmadinejad told a crowd in the northern town.
He said the missile used solid fuel and was "able to go beyond the atmosphere then come back and hit its target".
Solid-fuel missiles are reputedly more accurate than liquid-fuel missiles, which make up the majority of Iran's long-range arsenal.
Defense Secretary Robert Gates confirmed that a "successful flight test" had taken place, but said it was not clear if the missile had reached its intended target.
President Obama had well-known concerns about Iran's missile development programme, said White House spokesman Robert Gibbs.
He also had "the strong belief that the pursuit of these programmes does not strengthen the security of Iran but instead make them less safe".
Meanwhile, a spokesman for the Pentagon said Iran was at a crossroads, and must choose between "continued destabilisation in the region" or pursuing "more normalised" relations with its neighbours and the US.
tested a Sajjil missile
in November last year, described by officials at the time as a highly accurate "defensive" weapon.
Mr Ahmadinejad and three others have been cleared to run for office
The BBC's Jon Leyne in Tehran says the Sajjil-2 is one of Iran's longest range rockets, able to reach Israel and US bases in the Gulf, and the launch is likely to be criticised by the West.
It is hard to tell whether the launch was deliberately provocative, but the fact that it was announced by the president means it is probably intended as a political message, says our correspondent.
Following the announcement, Italy's foreign minister cancelled a planned trip to Tehran because Iranian officials changed the venue for his two-day visit.
Foreign Minister Franco Frattini rejected the request to meet Mr Ahmadinejad at the launch site, Semnan, instead of in the capital.
Hours before his trip should have begun, Mr Frattini expressed "strong regret over a lost opportunity" to discuss Iran's role in stabilising Pakistan and Afghanistan.
says its missile development programme is solely for defensive and scientific purposes, but critics say the rockets could one day be used to deliver nuclear warheads, although Iran denies its
has any military dimension.
The announcement of the launch came shortly after
Mahmoud Ahmadinejad was confirmed
as one of the four candidates cleared to stand in Iran's 12 June presidential elections.
He will run against two leading reformists - former Prime Minister Mir-Hossein Mousavi and ex-parliament speaker Mehdi Karoubi - and Mohsen Rezai, former chief of the Revolutionary Guards.
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