Iran tests more missiles as U.S. ready to defend

TEHRAN (Reuters) - Iran tested more missiles in the Gulf onThursday, state media said, and the United States remindedTehran that it was ready to defend its allies.

Washington, which accuses Tehran of seeking nuclear arms,said after Iran test-fired nine missiles on Wednesday thereshould be no more such tests if Iran wanted the world's trust.

U.S. leaders have not ruled out military options ifdiplomacy fails to assuage fears about Iran's nuclearprogramme, which Tehran says is only to produce electricity.

Israel, long assumed to have its own atomic arsenal, hassworn to prevent Iran from emerging as a nuclear-armed power.Last month it staged an air force exercise that stokedspeculation about a possible assault on Iranian nuclear sites.

Iran has vowed to strike back at Tel Aviv, as well as U.S.interests and shipping, if it is attacked, asserting thatmissiles fired during wargames under way in the Gulf includedones that could hit Israel and U.S. bases in the region.

U.S. Secretary of State Condoleezza Rice said on a visit tothe former Soviet republic of Georgia that no one should beconfused about Washington's commitment to protect its allies.

"We are also sending a message to Iran that we will defendAmerican interests and ... the interests of our allies," shesaid after meeting Georgian President Mikheil Saakashvili.

Rice said a planned U.S. missile defence shield, to bepartly based in the Czech Republic and Poland, would dampen anythreat of an attack from Iran. Russia opposes the project.

"We also are able to look to the future of a missiledefence system that will make it more difficult for Iran tothreaten (and) and be bellicose and say terrible things becausetheir missiles won't work," Rice said.

Iranian state TV and radio said the Revolutionary Guards --the ideologically driven wing of Iran's armed forces -- hadfired ground-to-sea, surface-to-surface and sea-to-air missilesovernight. Long-range missiles were also launched.

CHINA URGES RESTRAINT

"The ... manoeuvre brings power to the Islamic Republic ofIran and is a lesson for enemies," Guards Commander-in-ChiefMohammad Ali Jafari was quoted as saying.

Iran has threatened to shut the Strait of Hormuz, a vitalroute for Gulf oil exports, if it is attacked. Thursday'sexercises involved divers and speedboats, as well as the launchof a high-speed torpedo called Hout, state media said.

Commenting on Iran's Gulf manoeuvres, Kuwait said it hopedwisdom would prevail on all sides. "The region has had enoughof continuous wars," Kuwaiti Foreign Ministry UndersecretaryKhaled Jarallah was quoted by state news agency KUNA as saying.

On Iranian threats to close the Strait of Hormuz, he said:"We hope it does not come to this."

Wednesday's tests rattled global oil markets, pushing upthe price of oil. Crude prices have dipped in recent days buthave hit a series of record highs this year partly on Irantensions.

China urged restraint in the row over Iran's nuclear plans,but did not echo Western rebukes over the missile firings.

"We express our concern about these developments," ChineseForeign Ministry spokesman Liu Jianchao said of the tests.

He welcomed the prospect of fresh talks on the nuclearprogramme being pursued by Iran, the world's fourth largest oilproducer and China's third biggest crude supplier.

The United States, Britain, France, Germany, Russia andChina have offered Iran incentives to curb its nuclear work.Tehran rejects their demand that it suspend uranium enrichment.

European Union foreign policy chief Javier Solana, actingfor the six powers, is expected to meet Iranian officials fortalks on the package, but no time or place has been announced.

China and Russia, which is building Iran's first, and sofar only, nuclear power plant, have been resisting U.S.-ledcalls for expanding U.N. sanctions on the Islamic Republic.

Sanctions have made Western firms increasingly wary aboutinvesting. France's Total said on Thursday it would not investfor now in a big gas deal due to the political risk.

Iran has brushed off the impact of Western caution sayingit has a big enough cash pile from windfall oil earnings tocarry out the project itself or find other interested parties.

"This is our message. We will proceed with development withor without them," Iranian Oil Minister Gholamhossein Nozaritold journalists when asked about the latest comments fromTotal.

(Additional reporting by Edmund Blair, Zahra Hosseini andHashem Kalantari, and Arshad Mohammed in Tbilisi; Editing byJon Boyle)