Iran says it has successfully tested a short-range missile equipped with a new guidance system that it plans to install on all future missiles it builds.

Defense Minister Ahmad Vahidi said on Saturday that the new system has the capability of striking both land and sea targets. He added that the Fateh 110 missile has a range of about 300 kilometers, meaning it could strike only Iran's immediate neighbors.

Vahidi said the new guidance system would be part of all future missiles built by Iran.

Early last month, official Iranian media said it had successfully fired the Shahab 3 missile, which flew up to 1,300 kilometers and shorter-range Shahab 1 and 2 and other missile classes.

The West suspects Iran wants to build nuclear weapons and a European Union oil embargo meant to pressure Iran for its nuclear program went into effect on July 1. Iranian officials have in the past threatened to wipe Israel off the face of the Earth. Israel has hinted at an attack if diplomatic efforts and sanctions fail to eliminate Iran's nuclear ambitions.