Iran on Sunday test-fired a surface-to-surface short-range missile a day after its army launched large-scale military exercises througout the country, state-run television reported. "Saegheh, the missile, has a range of between 80 to 250 kilometers," the report said. It said the missile was tested in the Kashan desert, about 250 kilometers southeast of the capital of Teheran. Saegheh means lightning in Farsi. Iran has routinely held war games over the past two decades to improve its combat readiness and to test equipment such as missiles, tanks and armored personnel carriers. But the new tests, in the wake of the Lebanon-Hizbullah fighting, seemed certain to create new tensions with the West. State-run television said the missile was built based on domestic know-how, although outside experts say much of the country's missile technology originated from other countries. State-run TV showed video showing 10 missiles being launched from mobile launching pads. The UN Security Council passed a resolution last month calling for Iran to suspend uranium enrichment by August 31 or face the threat of economic and diplomatic sanctions. Iran has rejected as "illegal" the binding resolution, saying it had not violated any of its obligations under the Nuclear Non Proliferation treaty. On Sunday, Iran announced it will offer a "multifaceted response" to a Western package of incentives aimed at persuading it to suspend uranium enrichment activities, but insisted that it would not cease enriching uranium. Iran is already equipped with the Shahab-3 missile, which means "shooting star" in Farsi, and is capable of carrying a nuclear warhead. An upgraded version of the ballistic missile has a range of more than 2,000 kilometers and can reach Israel and US forces in the Middle East. Last year, former Defense Minister Ali Shamkhani said Teheran had successfully tested a solid fuel motor for the Shahab-3, a technological breakthrough for the country's military. Iran's military test-fired a series of missiles during large-scale war games in the Persian Gulf in March and April, including a missile it claimed was not detectable by radar that can use multiple warheads to hit several targets simultaneously. After decades of relying on foreign weapons purchases, Iran's military has been working to boost its domestic production of armaments. Since 1992, Iran has produced its own tanks, armored personnel carriers, missiles and a fighter plane, the government has said. It announced in early 2005 that it had begun production of torpedoes.