The China Times said the Hsiung Feng missiles, which have a range of 1,000 kilometers (600 miles), were deployed across the island by the defense ministry's new missile command.

The missiles, which each cost some 100 million Taiwan dollars (3.13 million , were developed by the military-run Chungshan Institute of Science and Technology, the paper said.

The institute was also developing cruise missiles with a range of 2,000 kilometers for further deployment.

The China Times said President Chen Shui-bian had inspected the missile command and witnessed a mock launch of the cruise missiles.

The defense ministry declined to comment on the report.

Taiwan reportedly successfully test-fired its first cruise missile earlier this year which flew over 500 kilometers before hitting its target.

Last month the Pentagon released a report warning that China had deployed up to 730 ballistic missiles targeting the island.

It said Beijing's defense build-up could tip the military balance against Taiwan and pose a credible threat to other countries in the region.

In a bid to beef up Taiwan's defense capabilities, the cabinet has approved a revised arms deal worth some 15.5 billion dollars to buy weapons from the United States, its largest arms supplier.

The arms package over a 15-year period from 2005, pending approval by parliament, includes eight conventional submarines, a modified version of the Patriot anti-missile system and a fleet of anti-submarine aircraft.

The massive budget proposal has stirred heated debate on the island as critics said the spending could further provoke China and heighten cross-strait tensions.

China sees Taiwan as part of its territory awaiting reunification despite their split in 1949, and has repeatedly threatened to invade if the island declares formal independence.

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