TEHRAN: Iran test fired nine missiles yesterday and warned the United States and Israel it was ready to retaliate to any attack over its disputed nuclear projects.

The missile tests rattled oil markets, helping crude prices to shoot up by about $2 a barrel after recent falls.

Speculation that Israel could bomb Iran has mounted since a big Israeli air drill last month. US leaders have not ruled out military options if diplomacy fails to end the nuclear row.

Revolutionary Guards commander Hossein Salami said in televised comments that thousands of missiles were ready to be fired at “pre-determined targets.” Missiles were shown soaring from desert launch pads, leaving long vapor trails.

“We warn the enemies who intend to threaten us with military exercises and empty psychological operations that our hand will always be on the trigger and our missiles will always be ready to launch,” he said.

On Tuesday, an aide to Ayatollah Ali Khamenei warned that Iran would “set fire” to Israel and the US Navy in the Gulf as its first response to any attack. “Tel Aviv and the US fleet in the Gulf would be the targets that would be set on fire in Iran’s crushing response,” said Ali Shirazi, Khamenei’s representative to Revolutionary Guards naval forces.

The White House told Iran to “refrain from further missile tests if they truly seek to gain the trust of the world.”

But the United States gave no hint to leaders of a Group of Eight rich nations meeting in Japan this week that it planned to attack Iran, Italian Prime Minister Silvio Berlusconi said.

In Washington, a US official told a Congressional panel that Iran had made only “modest” progress in its nuclear program because of UN sanctions, while warning Tehran that it would pay dearly if it pursued its current course.

“It is apparent that Iran has not yet perfected enrichment (of uranium), and as a direct result of UN sanctions, Iran’s ability to procure technology or items of significance to its missile programs, even dual-use items, is being impaired,” said Undersecretary of State for Political Affairs William Burns.

US Secretary of State Condoleezza Rice suggested the tests justified US plans for an anti-missile shield with bases in Eastern Europe, which Russia firmly opposes.

“Those who say that there is no Iranian threat against which to be building missile defenses perhaps ought to talk to the Iranians about... the range of the missiles that they test fired,” Rice said in Bulgaria.

France, Germany and Italy joined criticism of Iran.

“These are very dangerous missiles — that’s why the international community and not just Israel has an interest in blocking this escalation in a definitive way,” Italian Foreign Minister Franco Frattini said in Ramallah.

France said the tests heightened international concerns, while Germany voiced regret that Iran had responded to an offer of incentives by world powers with a “gesture of ill will.”

US Democratic presidential candidate Barack Obama called Iran a “great threat” and called for cooperation with allies to tighten pressure on Tehran. His Republican opponent John McCain voiced support for the missile shield to counter Iran.

Iran’s State Press TV said the “highly advanced” missiles tested by the Revolutionary Guards included a new Shahab 3 missile, which officials have said could reach targets 2,000 km away. Iran has said Israel and US bases are in its range.

Some US facilities across the Gulf are little more than 200 km from Iran’s coast. The United States has air and naval bases in nearby Arab states, including Qatar and Bahrain.

Iran has said US forces are vulnerable because of their presence in two neighboring countries, Iraq and Afghanistan.

Israel, the Middle East’s only nuclear-armed power, has vowed to prevent Iran from acquiring an atomic bomb.