The Fateh 110 -- Farsi for "Conqueror" -- is equipped with an upgraded guidance control system and developed domestically by Iran's Aerospace Industries Organization.
The launch of what government officials in Tehran billed as the third generation of the Fateh 110 surface-to-surface missile system, was shown on state television. The launch followed a string of other defense-related tests and disclosures announced by the government in Tehran in recent weeks.
Citing statements made by the Iranian Defense Minister Ahmad Vahidi, the Voice of America said Iran's new missile was the country's latest display of "technological prowess" and that it was an "improvement over its predecessors."
Vahidi explained that the new solid-fuel missile offered a more "precise navigation and control system, allowing it to hit its targets with greater precision."
Israeli officials billed the launch as part of Tehran's attempt to show off so-called new military platforms in an effort to flex the Islamic republic's muscles after taking step to activate the Bushehr nuclear reactor.
Israel worries about Iran because of Tehran's controversial nuclear program, missiles and repeated threats against the Jewish state. Officials in Israel have suggested that they could launch pre-emptive strikes against Iranian nuclear sites if it is shown that Tehran is developing nuclear weapons.
Iran has long spurned the allegation claiming its nuclear program is intended for peaceful purposes.
The Islamic Republic is shielded by a sophisticated ground-to-air missile system. In recent months, the government in Tehran accused the U.S. administration of trying to scupper an S-300 missile defense deal with Russia for fear that Iran may reverse engineer the system.
Fired from a mobile launch platform, the Fateh is said to have a longer range than its earlier version. Reports have described it as measuring 29.5 feet long and weighing about 7,700 pounds.
Last week, Tehran also unveiled another surface-to-surface missile. It also touted production of two new missile equipped speedboats and presented a new drone capable of dropping bombs in a radius of about 620 miles.
The product, named Kara -- the diminutive of Imam Ali -- can carry either two 115-pound bombs or a single bomb of 250 pounds.
"This jet is a messenger of honor and human generosity and a savior of mankind, before being a messenger of death for enemies of mankind," Iranian President Mahmoud Ahmadinejad said in presentation of the drone.