"The range of this defence system (missile) is more than 40 km and it is able to pursue and hit the enemy's airplanes and helicopters on a smart basis and at supersonic speed," Defence Minister Mostafa Mohammad Najjar said, without specifying how the missile compared to previous such weapons.
Najjar was quoted by Iran's Fars News Agency three days after Israel issued contradictory signals on whether it might bomb Iran, with its foreign minister saying there were no such plans and the defence minister saying all options were open.
The missile announcement came less than a week before a June 12 presidential election, in which conservative President Mahmoud Ahmadinejad is facing a challenge from moderates advocating a detente in Tehran's international relations.
Fars, a semi-official news agency, said production of the Shahin (hawk) missile defence system was one of the "most important and complex projects" undertaken by Iran's defence industry after the country's 1979 Islamic revolution.
Iran's Press TV said all parts of Shahin were produced in the country, which is under U.N. and U.S. sanctions over its disputed nuclear programme.
The United States and Israel accuse Iran of seeking to develop nuclear bombs, a charge Tehran denies, and have not ruled out military action if diplomacy fails to resolve the row.
Israel, widely believed to be the Middle East's only nuclear power, has repeatedly described Iran's nuclear programme as a threat to its existence.
Iranian leaders often dismiss talk of a possible strike by Israel, saying it is not in a position to threaten Iran, the world's fifth-largest oil exporter. They say Iran would respond to any attack by targeting U.S. interests and Israel.
The Islamic state often makes announcements of advances in its defence capabilities, including production of new weaponry.
Military experts say Iran rarely reveals enough detail about its new military equipment to determine its efficacy but say the Islamic Republic, despite having much less fire-power than U.S. forces, could still cause havoc in the Gulf if it was pushed.
Last month, it said it had tested a missile that defence analysts say could hit Israel and U.S. bases in the Gulf.
In March, Russia's Interfax news agency said Moscow may freeze a reported deal to deliver S-300 air defence systems to Iran. The United States and Israel had watched with unease reports on supplies of Russia's formidable S-300 system to Iran.
The possession of an air defence system as efficient as the S-300 could help Iran fend off potential air strikes by Israel and the United States on its nuclear sites.
