President Mahmoud Ahmadinejad said on Wednesday that Iran has test-fired a new medium-range surface to surface missile and again insisted there will be no climbdown over Iran's nuclear programme.

"The defence minister (Mohammad Mostafa Najjar) told me today that we launched a Sejil-2 missile, which is a two-stage missile and it has reached the intended target," Ahmadinejad said in a speech in the northern town of Semnan.

"I was told that the missile is able to go beyond the atmosphere then come back and hit its target. It works on solid fuel," Ahamdinejad added to cheers from the crowd.

He did not specify the missile's range.

The defence minister said on November 12 that Iran had test-fired a new generation of ground-to-ground missile.

"This is a two-stage missile carrying two engines with combined solid fuel," Najjar said at the time, adding that the missile was named Sejil.

State television then showed footage of the launch of the missile which is similar in size to Iran's medium-range Shahab 3.

In the past, Iran has often boasted of developing new weapons systems only to be met with scepticism from Western defence analysts.

Najjar told the television in November that the new missile had "a range of close to 2,000 kilometres (1,350 miles)," which is similar to that of the Shahab-3 and sufficient to put Iran's regional archfoe Israel in range.

Israel said that the new missile test should also be a source of concern for European countries which would also now be in range.

"In terms of strategic importance, this new missile test doesn't change anything for us since the Iranians already tested a missile with a range of 1,500 kilometres (nearly 950 miles), but it should worry the Europeans," Deputy Foreign Minister Danny Ayalon said.

"The Iranians are also trying to develop a ballistic missile with a range of 10,000 kilometres (6,250 miles) that could reach the coast of the United States," Ayalon told public radio.

Hawkish new Israeli Prime Minister Benjamin Netanyahu has said Iran's missile technology and controversial nuclear programme pose an existential threat to the Jewish state greater than any it has faced since its creation in 1948.

Iran insists that its nuclear programme is aimed solely at producing electricity for a growing population once its fossil fuels run out.

But Israel -- which has the region's sole if undeclared nuclear arsenal -- suspects it is cover for a drive for the bomb.

The UN Security Council has imposed three packages of sanctions against Iran after it failed to heed successive ultimatums to suspend uranium enrichment, the process which makes fuel for nuclear power stations but in highly extended form can also produce the fissile core of an atomic bomb.

But Ahmadinejad again insisted on Wednesday that Iran would not give in to any pressure over its nuclear programme.

"They (Western governments) said if you don't stop, we will adopt (sanctions) resolutions... They thought we would retreat but that will not happen," the Iranian president said.

"I told them you can adopt 100 sets of sanctions, but nothing will change."

Sejil, the name of the new missile, is a Koranic term referring to stones thrown by birds sent by God to defeat an army of elephants with whom the king of Yemen wanted to destroy Mecca 14 centuries ago.