Iran test fired a long-range, radar-evading missile on Sunday (August 27) from a submarine in the Gulf as part of war-games that began earlier this month, state television reported. The missile was called Sagheb, which means Piercing, but the report did not give the missile's range. "Minutes ago it was launched from a submarine in the Persian Gulf and it hit the target," television reported. Western nations have been watching developments in Iran's missile capabilities with concern amid a stand-off over the country's nuclear programme, which the West says is aimed at building atomic bombs. Iran says the programme is only civilian. Iran's military also held war-games in the Gulf in April. Those exercises were interpreted by analysts as a thinly veiled threat that Iran could disrupt vital oil shipping lanes if pushed by an escalation in the nuclear dispute. A navy admiral, named only as Kouchaki, told state television the missile had been designed and produced in Iran. "This missile was launched from a submarine in the Persian Gulf. This is a long-range and very high-speed missile which can hit enemy targets with destructive power. It is also radar-evading. It can be launched by the navy and submarine of the Islamic Republic (of Iran)." The Islamic Republic has three ageing Kilo class diesel-electric Russian submarines and also builds midget submarines. The Sagheb is listed as an air defence missile by the Nuclear Threat Initiative Web site (www.nti.org). Military analysts say Iran often exaggerates its abilities, they argue that its military equipment is outmoded and that new missiles Iran claims to have produced are often modified versions from other countries such as North Korea. But they also say Iranian forces could, if pushed, cause havoc in shipping lanes in the Gulf, even if they would be no match in any conventional confrontation with the high-tech forces of the U.S. and other navies operating in the area. Meanwhile, the Iranian foreign ministry said that it did not believe that the inauguration of the Arak heavy water rector would complicate negotiations with the West on its nuclear programme. President Mahmoud Ahmadinejad on Saturday (August 26) launched a new phase in the Arak heavy-water reactor project, saying Tehran would not give up its right to nuclear technology despite Western fears it aims to make atomic bombs. The Arak project, once complete, will produce plutonium as a by-product that could be used to make atomic warheads. But the reactor that will produce this is still being built. "I don't think that will complicate the situation, but we have done has nothing to do with our file, our nuclear activity, I mean what be have done is hundred percent legal, legitimate and this is in the framework of our rights. Therefore I do not think that we create any problem," Iranian Foreign Ministry spokesperson Hamid Reza Asefi said. The UN Security Council has told Iran to suspend atomic fuel work by August. 31 or face possible sanctions. The West suspects Iran is secretly pursuing nuclear arms. Iran insists its nuclear work aims only to generate electricity. The West's main concern is Iran's enrichment programme, a process that can be used to produce fuel for nuclear power stations or material for nuclear bombs. The Islamic Republic has refused to stop the work and shrugged off the threat of sanctions, saying these would propel soaring oil prices higher still, damaging the industrialised world. The United States has warned of swift action on sanctions after August Britain, Germany and France have been more cautious in public. Russia and China, both major trade partners of Iran, have been unwilling and could veto sanctions in the Security Council. Iran responded on Tuesday (August 22) to a 2 1/2-month-old package of incentives proposed by six world powers and said its reply contained ideas that would allow serious talks. It was unclear whether the reply would avert a resort to sanctions. UN Secretary-General Kofi Annan will visit Iran on Saturday (September 2), two days after the UN deadline, Foreign Ministry spokesman Hamid Reza Asefi told the news conference. Asefi mentioned that Annan will hold talks with Iranian officials discussing a number of issues during his two-day visit.