By Alistair Lyon
TEHRAN (Reuters) - Iran tested more missiles in the Gulf on Thursday, state media said, and the United States reminded Tehran that it was ready to defend its allies.
Washington, which accuses Tehran of seeking nuclear arms, said after Iran test-fired nine missiles on Wednesday there should be no more such tests if Iran wanted the world's trust.
U.S. leaders have not ruled out military options if diplomacy fails to assuage fears about Iran's nuclear program, which Tehran says is only to produce electricity.
Israel, long assumed to have its own atomic arsenal, has sworn to prevent Iran from emerging as a nuclear-armed power. Last month it staged an air force exercise that stoked speculation about a possible assault on Iranian nuclear sites.
Defense Minister Ehud Barak said on Thursday he favored the use of diplomatic pressure and sanctions, but added: "Israel is the strongest country in the region and has proved in the past it is not afraid to take action when its vital security interests are at stake."
Iran has vowed to strike back at Tel Aviv, as well as U.S. interests and shipping, if it is attacked, asserting that missiles fired during war games under way in the Gulf included ones that could hit Israel and U.S. bases in the region.
U.S. Secretary of State Condoleezza Rice said on a visit to the former Soviet republic of Georgia that no one should be confused about Washington's commitment to protect its allies.
"We are also sending a message to Iran that we will defend American interests and ... the interests of our allies," she said after meeting Georgian President Mikheil Saakashvili. Continued...Rice said a planned U.S. missile defense shield, to be partly based in the Czech Republic and Poland, would dampen any threat of an attack from Iran. Russia opposes the project.
"We also are able to look to the future of a missile defense system that will make it more difficult for Iran to threaten (and) and be bellicose and say terrible things because their missiles won't work," Rice said.
Iranian state TV and radio said the Revolutionary Guards -- the ideologically driven wing of Iran's armed forces -- had fired ground-to-sea, surface-to-surface and sea-to-air missiles overnight. Long-range missiles were also launched.
CHINA URGES RESTRAINT
"The ... maneuver brings power to the Islamic Republic of Iran and is a lesson for enemies," Guards Commander-in-Chief Mohammad Ali Jafari was quoted as saying.
Iran has threatened to shut the Strait of Hormuz, a vital route for Gulf oil exports, if it is attacked. Thursday's exercises involved divers and speedboats, as well as the launch of a high-speed torpedo called Hout, state media said.
Commenting on Iran's Gulf maneuvers, Kuwait said it hoped wisdom would prevail on all sides. "The region has had enough of continuous wars," Kuwaiti Foreign Ministry Undersecretary Khaled Jarallah was quoted by state news agency KUNA as saying.
On Iranian threats to close the Strait of Hormuz, he said: "We hope it does not come to this."
The missile tests rattled global oil markets, pushing up the price of oil. Crude prices have dipped in recent days but have hit a series of record highs this year partly on Iran tensions. Continued...
China urged restraint in the row over Iran's nuclear plans, but did not echo Western rebukes over the missile firings.
"We express our concern about these developments," Chinese Foreign Ministry spokesman Liu Jianchao said of the tests.
He welcomed the prospect of fresh talks on the nuclear program being pursued by Iran, the world's fourth largest oil producer and China's third biggest crude supplier.
The United States, Britain, France, Germany, Russia and China have offered Iran incentives to curb its nuclear work. Tehran rejects their demand that it suspend uranium enrichment.
European Union foreign policy chief Javier Solana, acting for the six powers, is expected to meet Iranian officials for talks on the package, but no time or place has been announced.
China and Russia, which is building Iran's first, and so far only, nuclear power plant, have been resisting U.S.-led calls for expanding U.N. sanctions on the Islamic Republic.
Sanctions have made Western firms increasingly wary about investing. France's Total said on Thursday it would not invest for now in a big gas deal due to the political risk.
Iran has brushed off the impact of Western caution saying it has a big enough cash pile from windfall oil earnings to carry out the project itself or find other interested parties.
"This is our message. We will proceed with development with or without them," Iranian Oil Minister Gholamhossein Nozari told journalists when asked about the latest comments from Total.
(Additional reporting by Edmund Blair, Zahra Hosseini and Hashem Kalantari, and Arshad Mohammed in Tbilisi; Editing by Jon Boyle))