Military ruler President Pervez Musharraf hailed the launch of the Hatf VII Babur, which is capable of carrying nuclear warheads, as a "major milestone" in the country's defence programme, an army statement said.

Pakistan did not give advance warning to rival India, despite a deal made at the weekend between the two countries to notify each other before missile tests and to set up a hotline to prevent an accidental atomic exchange.

The agreement only refers to ballistic missiles and not to cruise missiles, Pakistani foreign ministry spokesman Muhammad Naeem Khan told AFP.

The military said the launch of the missile, which has a range of 500 kilometres (310 miles), meant that Pakistan had "joined a select group of countries which have the capability to design and develop cruise missiles".

The scientists and technicians involved had "again done the nation proud by mastering a rare technology", General Musharraf added in the statement, while Prime Minister Shaukat Aziz also sent his congratulations.

"It is a gift of the scientists on the birthday of President Musharraf and the Independence Day," state media quoted Information Minister Sheikh Rashid as saying about the test.

Musharraf marked his 62nd birthday on Thursday, while Pakistan celebrates the 58th anniversary of the end of British colonial rule on Sunday.

The missile could avoid radar detection to penetrate hostile defensive systems "with pinpoint accuracy", the statement added, and could also be launched from ships, submarines and aircraft.

According to the Federation of American Scientists, there are at least 12 countries who export cruise missiles: Britain, the United States, China, France, Germany, Israel, Italy, Japan, Norway, Russia, Sweden, and Taiwan.

India unveiled its first cruise missile, a supersonic joint venture with Russia named the BrahMos, in 2001. There was no immediate reaction from New Delhi.

Pakistan and India conducted tit-for-tat test nuclear detonations in 1998 and came to the brink of war in 2002. The historical rivals, who have already fought three wars, routinely carry out tests of nuclear-capable missiles.

On Saturday they signed the long-awaited deal for the nuclear hotline and formalised the pre-notification of missile tests. The telephone link is to be set up by September.

Ishtiaq Ahmad, professor of international relations at Islamabad's Quaid-e-Azam University, said the test was a "major achievement".

"So far Pakistan has been able to match India's ballistic missile capability and this was the only area in which they were lagging behind," the analyst told AFP.

The agreement was part of a year-and-a-half long peace process that has brought India and Pakistan to their closest relationship for decades and seen the revival of severed sporting and transport links.

Pakistan is at the centre of investigations into a nuclear black market run by its disgraced scientist Abdul Qadeer Khan, who confessed in 2004 to passing atomic secrets to Iran, Libya and North Korea.

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