"It was a test of a motor and not a test of a missile," a defence ministry official told AFP, clarifying earlier reports in the Iranian press that a missile itself was tested on Sunday.

A defence ministry statement quoted Defence Minister Ali Shamkhani as saying that "the more durable fuel allows the missile to be more accurate", and said the new technology could be built into Iran's Shahab-3 missiles.

The test was "100 percent successful", Shamkhani said. The ministry also denied a report on Iranian state television that a "two-stage rocket motor" -- in theory for a missile capable of hitting Europe -- had been tested.

Iran says the Shahab-3 has a range of at least 2,000 kilometresmiles) -- meaning that arch-enemy Israel and US bases in the region are well within range.

The country has recently upgraded the Shahab-3 ballistic missile, a single-stage device believed to be based on a North Korean design. Up to now it has been based on liquid-fuel technology.

Military experts contacted by AFP said the test, if indeed successful, would signify an important breakthrough for the Islamic republic's missile programme.

Firstly, in order to develop a missile with a range greater than 2,000 kilometres -- in effect a two-stage rocket -- a country needs to master the more complex solid fuel technology.

Iran has, however, denied developping a missile with a reach beyond the Middle East region.

"The maximum range of a single stage missile is around 2,000 kilometers. In order to send a missile further, you need a twin stage design that separates in mid flight," said one analyst.

"This separation is very complex, and in order to maintain the accuracy of the missile, it needs to be using solid fuel. In very simplistic terms, think of a liquid fuel missile as a bottle of mineral water -- the liquid is sloshing around and makes the bottle unstable," he said.

"And even if the missile is only a single stage design, solid fuel makes it more accurate," he added.

Secondly, solid fuel missiles of all ranges are more mobile and can be deployed far more quickly than liquid fuel devices, which need to filled up immediately before they are launched.

"It makes the missiles far more portable. It makes missile deployment much quicker. It makes missile deployment teams ," a military analyst said.

Tehran's rapid progress on its ballistic missile programme is a major cause for concern among the international community, particularly Israel, which is already alarmed over Iran's nuclear activities.

Britain, France and Germany are currently engaged in a tough diplomatic effort to resolve the nuclear issue without recourse to the UN Security Council and possible sanctions.

In a quick reaction to the latest Iranian test, Israel warned the "free world to beware of Iran's plans"

"We are closely monitoring these worrying projects being plotted in Iran," said one senior Israeli official contacted by AFP.

"Iran is trying to develop a nuclear weapon and is developing its vectors to this end. Its ballistic missiles do not only threaten Israel: they can also be turned on Europe," he added.

Iran insists it is not seeking to develop missiles with a longer range than the Shahab-3, and has denied allegations that it is seeking to develop nuclear weapons. The country says its missiles will only be tipped with conventional warheads.

But many are not convinced: as one Western diplomat in Iran has remarked, "why develop a Rolls Royce to only deliver a pizza?"

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