July 9 (Bloomberg) -- Iran's test-firing of a long-range missile capable of reaching Israel violates United Nations Security Council resolutions and further isolates it from the rest of the world, U.S. officials said.

Iran should ``refrain from further missile tests if they truly seek to gain the trust of the world,'' White House spokesman Gordon Johndroe told reporters at the Group of Eight Summit in Toyako, Japan, where President George W. Bush is meeting with other world leaders.

Israeli government spokesman Mark Regev said Israel viewed the test with ``grave concern'' and sought no conflict or hostilities with Iran.

Iran's Arabic state television Al-Alam announced the test today on its Web site. It said the missile, a Shahab-3 model with a 2,000-kilometer (1,240-mile) range and a one-ton weight, was fired successfully at 8 a.m. local time. Jerusalem, Israel's capital, is about 660 miles from Iranian territory.

The test is the latest display of military firepower in the region that has escalated tension with Iran and roiled financial markets. On July 7, the U.S. Fifth Fleet ran a maneuver of warships to practice protecting oil rigs in the Persian Gulf, while a June 2 drill by Israeli warplanes was interpreted by military analysts as a rehearsal for a strike on Iran.

About a fifth of the world's daily oil supply travels through the strait between Iran and Oman at the mouth of the Persian Gulf. Iran has said it may as a last resort blockade the chokepoint, known as the Strait of Hormuz, if its nuclear sites are attacked.

Supreme Leader

Today's test follows comments by Ali Shirazi, an aide to Supreme Leader Ayatollah Ali Khamenei, who said yesterday that Iran would strike Israel and the U.S. Navy in the Persian Gulf as a first response to any American attack on its nuclear program.

The test is part of war games being held by the Iranian Revolutionary Guards Corps in the Persian Gulf, state television said. Nine missiles ``with improved accuracy'' were tested during the exercises, including the Zelzal and the Fateh with a range of 400 kilometers and 170 kilometers respectively, Iran's English-language Press TV reported on its Web site.

``The aim of this maneuver is to show the determination of armed forces in protecting Iran,'' Hossein Salami, a Revolutionary Guard commander, was quoted as saying by Iran's state television. ``These missiles are test-fired in honor of Iran and to show that this is only a small part of Iran's capability and defensive power.''

Israeli Exercise

Political tension has escalated since the New York Times reported June 20 that Israel rehearsed a possible attack on Iran's nuclear sites in military exercises held in the eastern Mediterranean. Bush said on July 2 ``all options'' remain on the table even though he is committed to pursuing a diplomatic route to solve the nuclear conflict with Iran.

In 2006, Iran announced the test-firing of a Shahab-3 ballistic missile, which it said was able to travel 2,000 kilometers. During a subsequent military parade, though, an announcer said the Shahab-3 had a 1,300-kilometer range, Agence France-Presse reported at the time. In Nov. 2007, the nation said it had constructed the Ashura missile with a range of 2,000 kilometers.

Secretary of State Condoleezza Rice said the Iranian test underscores the need for an anti-missile defense it is seeking to install in Czechoslovakia and Poland over Russian objections.

Not `Imaginary'

``The missile threat is not an imaginary one,'' she told reporters in Sofia, Bulgaria, today. ``Those who say that there is no Iranian missile threat against which we should be building this defense system, perhaps ought to talk to the Iranians about their planes, about the range of the missiles they just fired.''

Iranian President Mahmoud Ahmadinejad yesterday dismissed the possibility of a war with the U.S. and Israel over the issue, saying his country seeks to avoid clashes.

``We're making the utmost effort for providing peace and security at the world level,'' he said in Kuala Lumpur, where he attended a summit of Islamic nations.

The U.S. and its allies say Iran is using its atomic program to develop nuclear weapons. Iran, which is under three sets of UN sanctions for refusing to halt uranium enrichment, denies the allegation and says its activities are aimed at generating electricity. Enriched uranium can fuel a nuclear reactor or arm a weapon.

Iran is responding ``to a sense that they've gone too far with their illicit nuclear weapons program, they are under some threat,'' Gerald Steinberg, chair of the political studies department at Bar Ilan University in Israel, said in an interview with Bloomberg Television. ``This is a form of rhetoric,'' he said, adding that the Iranian government is using ``a primitive capability'' based on old North Korean technology.

Oil for August delivery rose as much as $2.24, or 1.7 percent, to $138.28 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $136.57 at 10:25 a.m. in New York.

To contact the reporter on this story: Ladane Nasseri in Tehran at lnasseri@bloomberg.net.

Last Updated: July 9, 2008 10:37 EDT