The display of military muscle comes at a time of rising tension between Iran and six major powers, which fear Tehran's nuclear program is aimed at producing nuclear weapons. Tehran denies this is the program's purpose.
Iran's elite Revolutionary Guards and military forces jointly started five days of maneuvers in various parts of the Islamic state, Brigadier General Ahmad Mighani said, according to state television.
"It is the biggest war game, which takes place over an area 600,000 sq km (230,000 sq miles). The aim of this war game is to promote military power of the armed forces against any attack," the television quoted Mighani as saying.
The United States and Israel, which Iran does not recognize, say they want a diplomatic solution to the nuclear standoff, but refuse to rule out military action if diplomacy fails.
Iran has warned of a "crushing" response to any military action against its nuclear facilities.
"The aim of the drill is to display Iran's combat readiness and military potentials," Mighani said.
"Defense policies, psychological operations and innovations during the war game are among the objectives of the drill."
Iran has staged several war games in the past, including firing long-range Shahab-3 missiles, which it says have a range of 2,000 km (1,250 miles), putting Israel or U.S. bases in the Gulf in range.
World powers have urged Iran to reconsider its rejection of a U.N.-drafted deal which aimed to delay Tehran's potential ability to make bombs by at least a year by divesting the country of most of its enriched uranium.
The deal, brokered by the International Atomic Energy Agency (IAEA), calls on Iran to send some 75 percent of its low-enriched uranium to Russia and France, where it would be turned into fuel for a Tehran medical research reactor.
Iran ruled out on Wednesday sending enriched uranium abroad for further processing, saying it would consider swapping it for nuclear fuel provided it remained under supervision inside the country.
U.S. President Barack Obama has warned Tehran of a package of sanctions against the country within weeks. Iran has been hit by three rounds of U.N. sanctions over its refusal to halt sensitive uranium activities.
(Writing by Parisa Hafezi, Editing by Michael Roddy)
