Sept. 28 (Bloomberg) -- Iran test-fired its Shahab-3 missile, which puts Israel within reach, amid a threat that international talks this week on its nuclear program will lead to further sanctions.

The successful launch early today of the Shahab-3, which the military said has a range of 2,000 kilometers (1,240 miles), came on the second day of war games led by the Revolutionary Guards, according to state-run Press TV, which showed the test- firing. The government also announced the testing of shorter- range missiles yesterday.

The Foreign Ministry denied any link between the missile tests and the Oct. 1 nuclear talks in Geneva involving an Iranian delegation and representatives of the five permanent members of the United Nations plus Germany. Iran has refused UN demands to suspend uranium enrichment, which the U.S. and some of its allies allege is aimed at developing weapons.

The U.S., U.K. and France last week said Iran secretly built a second plant for enriching uranium in violation of the nuclear Non-Proliferation Treaty. Iran’s construction of the underground facility may prompt additional economic sanctions, including restrictions on banking and on oil and gas technology, U.S. Defense Secretary Robert Gates told CNN yesterday.

Iran also fired its two-stage Sejil missile, the state-run Fars news agency said today without saying what type of Sejil it was or giving details of its range. The Guards also said they tested a multiple-missile launching system and several short-and medium-range missiles.

‘Deeply Destabilizing’

The test firings are “deeply destabilizing,” the French Foreign Ministry said today in an online news conference. “We’re calling on Iran to choose the way of cooperation and not that of confrontation,” the ministry said.

The exercise “sends the wrong signal to the international community,” the U.K. Foreign Office said in an e-mailed statement. “We urge Iran to engage in sensible dialogue” and “provide reassurance on its nuclear program and on its role in the region,” the Foreign Office said.

“There is not only concern about what is being done in the nuclear dossier, where there are some extra difficulties, but also on the delivery means,” European Union foreign policy chief Javier Solana told reporters as he arrived in Sweden for a meeting of EU defense ministers, when asked about the missiles. “Everything that is done in that context is a concern.”

A former U.K. ambassador to Iran, Richard Dalton, said Iranian officials have “been poked and they think this is a good moment to show off their capabilities.”

Show of ‘Strength’

“They often do military maneuvers or rocket launches when they feel they need to show their national strength,” Dalton, an analyst for Chatham House, a London-based research group, said today in a telephone interview. The test-firings are neither “particularly remarkable” nor demonstrate “anything new about Iranian capabilities,” he said

The Shahab-1 and Shahab-2 missiles, which can travel 300 to 700 kilometers, were launched late yesterday, General Hossein Salami, head of the air force, told Press TV. The Shahabs are based on the Soviet-designed Scud, itself derived from Germany’s World War II V2.

The Federation of American Scientists says the Shahab-3 only has a range of 1,290 kilometers, though the Shahab-4 is capable of the longer range of 2,000 kilometers. In May, Iran launched a Sejil-2 missile, which it said has a range of 2,000 kilometers.

Prophet IV

The latest maneuvers are a routine operation to assess the country’s military ability, the government in Tehran said.

The exercise, called Prophet IV, is aimed at “practicing management of long-term preventive and defensive operations,” Salami said on the Guards’ Web site. The maneuvers coincide with the start of Iran’s “Sacred Defense” week, marking the eight- year war with neighboring Iraq that ended in 1988.

Iranian officials are set to meet in Geneva with representatives of the U.S., Russia, China, France, the U.K., which are the permanent UN Security Council members, and Germany.

The “opportunity is ripe for talks to be constructive,” Iran’s Foreign Ministry spokesman, Hassan Qashqavi, said today in comments aired live from Tehran on state television.

President Barack Obama said on Sept. 26 he remains open to “a serious, meaningful dialogue” with Iran.

The UN’s International Atomic Energy Agency said it was informed by Iran on Sept. 21 that a new pilot fuel-enrichment plant was under construction.

Uranium Enrichment

Uranium enrichment is at the center of Western concerns about Iran’s nuclear program. The process isolates a uranium isotope needed to generate fuel for a nuclear power reactor; in higher concentrations it can be used to make a bomb. Iran denies it is developing a nuclear weapon and insists the enrichment is needed for civilian uses, such as the production of electricity.

Iranian officials rejected criticism for failing to mention the new enrichment plant’s existence previously, arguing that it’s only required to inform the IAEA 180 days before introducing nuclear material into the plant. President Mahmoud Ahmadinejad said the facility is “18 months away from operation.”

To contact the reporters on this story: Ladane Nasseri in Beirut at lnasseri@bloomberg.net; Ali Sheikholeslami in London at alis2@bloomberg.net.

Last Updated: September 28, 2009 08:34 EDT