Israel on Friday staged what it said was a planned test of a rocket propulsion system at a military base on the Mediterranean coast.

Israeli media, citing analysts, said the test appeared to be of a version of the Jericho ballistic missile with a range of at least 5,000 kilometres (3,100 miles), easily capable of hitting arch-foe Iran.

"This morning, Israel conducted a launching test from the Palmachim base of a rocket propulsion system," the Israeli defence ministry said in a brief statement.

"The scheduled test was pre-planned by Israel's ministry of defence and was carried out as expected," it said without elaborating.

In January 2008, Israel successfully test-fired a long-range ballistic missile, days after warning "all options" were open to prevent Iran from obtaining an atomic weapon.

Israel's Jericho ground-to-ground missile is believed to be capable of carrying a nuclear, chemical or biological warhead.

Israel was last believed to have tested its propulsion system in November 2011.

Israel and Western governments fear that Iran's nuclear programme masks a drive for an atomic weapons.

Iran denies any such ambition and insists its nuclear programme is for power generation and medical purposes only.

Israel is widely considered to be the Middle East's sole if undeclared nuclear power with an estimated arsenal of 200 warheads.

The test came as Israeli public radio said Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid met defence officials on Friday to discuss proposed budget cuts to conventional forces.

Reports say that as part of overall cuts in government spending, reductions are planned in the number of tanks, ships and planes, as well as the dismissal of thousands of career servicemen over the next year.

The radio said that Netanyahu had not yet given his approval.