Iran and the United States Tuesday underlined their military readiness for conflict should faltering diplomacy over Tehran's atomic activities fail, as tensions rose over tightened Western sanctions.

Iran said it successfully fired several dozen missiles -- including a medium-range Shahab-3 ballistic weapon with a range capable of striking Israel -- in war games in its central desert region.

US officials, meanwhile, detailed a quiet US military build-up in the Gulf region that includes the deployment of warships and F-22 stealth fighter jets.

The belligerent posturing came on the day technical experts from Iran and from world powers, including the United States, were due to meet in Istanbul in the latest round of talks.

Iran refuses to bow to Western demands that it curb its sensitive uranium enrichment under the pressure of punishing economic sanctions that were ramped up last week to their toughest level so far.

"The sanctions imposed against our country are the harshest and strongest ever imposed. If the enemies think they can weaken Iran with these sanctions, they are wrong," Iranian President Mahmoud Ahmadinejad said, quoted by the official IRNA news agency.

Tehran is demanding its "right" to enrichment be recognised and the sanctions be eased. It rejects Western suspicions that it is seeking a nuclear weapons capability.

Iranian foreign ministry spokesman Ramin Mehmanparast accused the Western nations in the so-called P5+1 group -- comprising the United States, Britain, France, Russia and China, plus Germany -- of dragging out the talks.

"Many people are starting to conclude that maybe there are specific goals in dragging out the talks and preventing their success. One option is that perhaps there is a link with the US (presidential) election" in November, he said.

Iranian Foreign Minister Ali Akbar Salehi told the ISNA news agency should the talks collapse, "the other alternative is confrontation."

Israel, which is not party to the talks, has warned it could launch pre-emptive air strikes on Iran's nuclear facilities to hinder what it sees as a threat by the Islamic republic to its existence.

US President Barack Obama has also repeatedly said that "all options" -- including US military action -- are on the table.

With that in mind, Iran Tuesday test-fired missiles into its central desert region in war games dubbed "Grand Prophet 7" and meant to simulate counter-attacks on US military bases in Afghanistan and other neighbouring countries, and possibly on Israel.

"The message of these Grand Prophet 7 manoeuvres is to show the determination, the will and the power of the Iranian people in defending their national interests and vital values," the number two of the elite Revolutionary Guards, General Hossein Salami, said, according to IRNA.

The launches included a Shahab-3 ballistic missile which has a maximum range of 2,000 kilometres (1,200 miles), enough to reach Israel, which is 1,000 kilometres from Iran.

The United States warned such tests were in violation of UN resolutions that ban Iran from any ballistic weapons activity.

"This is not a positive development," said State Department spokeswoman Victoria Nuland.

"Iran has had these active missile development programs for two decades and has continued its development of advanced missile capabilities, including increasing longer-range systems. And these remain of acute concern," she said.

Some 120 lawmakers in Iran's 290-seat parliament have also signed on to a draft bill calling for the strategic Strait of Hormuz to be closed to oil tankers headed to Europe in retaliation for an EU embargo on Iranian crude.

Nuland insisted the Strait was an international waterway and all ships enjoy transit passage rights.

"Any attempt by Iran to close the Strait or to require vessels to obtain Iranian consent would be inconsistent with international law and not recognised by the United States," she told reporters.

"We have over years and decades made clear that we intend to do what is necessary to maintain the openness of the Straits."

But one official told The New York Times Washington would view any attempt by Iran to close the waterway as a "red line" triggering a US military reaction.

"Don't even think about closing the strait. We'll clear the mines. Don't even think about sending your fast boats out to harass our vessels or commercial shipping. We'll put them on the bottom of the Gulf," the official said.