Short-range missiles were to be tested in the four-day exercise southeast of Tehran, which came as the US military was sending a second warship to Gulf waters amid growing international tension over Iran's atomic programme.

"Ground forces of Iran's elite Revolutionary Guards are completely ready to tackle any kind of foreign threats," said artillery commander Majid Ayeneh.

Among missiles to be tested were the Fajr 5, which military sources have reported has a range of around 75 kilometres (45 miles), and the Zelzal which is said to have a range of between 100 to 400 kilometres (60 to 250 miles).

The missile tests were announced just days after Iran's top nuclear negotiator Ali Larijani said the armed forces were ready to face any threat to its nuclear installations amid speculation Washington may be planning a military strike.

US Under Secretary of State Nicholas Burns said Sunday: "We leave all options on the table, but we are seeking a diplomatic solution to these problems."

Washington announced this month it was stepping up US military presence in the region by sending a second aircraft carrier to join one already in the Gulf, the first such buildup since the launch of the US-led war on Iraq in 2003.

In addition to ordering the deployment of the aircraft carrier USS John C. Stennis, the Pentagon announced that an air defence battalion equipped with Patriot missile defence systems would also go to the region.

Burns said mounting international pressure, including UN sanctions, has put the Islamic republic on the defensive, and pledged that Iran would face a second round of sanctions if it does not suspend nuclear activity in its main nuclear research centre in Natanz by February 21.

But Iranian Foreign Minister Manouchehr Mottaki told reporters on Monday that Tehran was "continuing building centrifuges (for uranium enrichment) and the International Atomic Energy Agency (IAEA) knows about it".

The UN Security Council passed Resolution 1737 in December, imposing sanctions on Iran because it has repeatedly refused to fully cooperate with the UN nuclear watchdog or suspend uranium enrichment.

In reprisal for the resolution, the head of parliament's national security commission, Alaeddin Borujerdi, announced Iran was blocking from the country 38 inspectors from the IAEA.

"This is the first step in implementing the parliament legislation" on limiting cooperation with the IAEA, Borujerdi told the ISNA news agency.

"The committee (in charge of implementing the parliamentary legislation) decided not to allow 38 inspectors to enter Iran and this restriction has been officially announced to the IAEA," he said.

IAEA inspectors regularly visit Iranian nuclear sites under the nuclear Non-Proliferation Treaty, to which Iran is a signatory.

Mottaki defended the move as "completely legal" and said that "IAEA member states have the right to oppose the trip of any inspector they wish".

Iran, OPEC's second largest oil exporter, insists its nuclear programme is solely aimed at meeting peaceful energy needs. However, the West fears that it could be diverted towards building a bomb.

Following talks in Brussels, EU foreign ministers made a political declaration that paves the way for EU legal experts to draw up the necessary legislation for the UN resolution to be implemented.

The foreign ministers "deplored Iran's failure to take the steps repeatedly required by the IAEA board of governors and the United Nations Security Council".

They agreed to halt trade in nuclear-related goods with the Islamic republic, freeze the assets of those linked to the programme and impose targeted travel bans.

But Iran has remained defiant on sanctions with President Mahmoud Ahmadinejad saying on Sunday: "Even if they adopt 10 other resolutions it will not have any effect."

earlier related report
Iran, Belarus sign defence agreement
Tehran (AFP) Jan 22 - Iran and its top European ally Belarus on Monday signed an agreement on defence cooperation, the semi-official Mehr news agency reported. Iranian Defence Minister Mostafa Mohammad Najar signed the memorandum of understanding with his Belarussian counterpart Leonid Maltsev, who was on a two-day visit to Tehran.

"Exchanging expert delegations, transfer of defence experience and cooperation in technical and educational fields are included in this memorandum of understanding," the agency said.

Maltsev also met President Mahmoud Ahmadinejad and the chief of the elite Revolutionary Guards, Yahya Rahim Safavi.

Belarus has emerged as a prominent supporter of Iran, openly backing Iran's contested nuclear programme.

Despite fierce Western criticism, Belarus has also sold Russian-made conventional military equipment and spare parts to Iran.

The deal was signed as Iran launched a round of war games to test short-range missiles amid the mounting international pressure on Tehran over its failure to suspend nuclear work.

The two countries already signed a raft of deals to massively increase bilateral trade in a November 2006 visit by Belarussian President Alexander Lukashenko to Tehran.

Lukashenko's government has been fiercely criticised by the European Union and the United States, who accuse him of running an authoritarian regime that clamps down on human rights.

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