Tensions brewing: Iran conducts missile exercise after US sanctions

The manoeuvres in the northeastern province of Semnan were aimed at demonstrating Iran's "complete preparedness to deal with the threats" and "humiliating sanctions" from Washington, the Guards' Sepahnews website said.

"Different types of domestically produced radar and missile systems, command and control centres, and cyber warfare systems will be used in this exercise," it said.

But a list of the missiles expected to be deployed published later on the website showed they were of very short range - up to 75 kilometres (47 miles).

US President Donald Trump imposed new sanctions on Iran on Friday over its test launch of a medium-range ballistic missile and its alleged support for Yemeni rebels, who recently targeted a Saudi warship.

Tensions continued to rise hours later when US Defence Secretary James Mattis said that Iran was "the single biggest state sponsor of terrorism in the world" before ensuring that Washington had no intentions to increase troop numbers in the Middle East in response.

But as concerns brewed, an official confirmed the new sanctions do not yet mean that the US has abandoned commitments it made to lift measures aimed at Iran's nuclear programme.

Trump has made no secret of his contempt for that accord, which his predecessor Barack Obama approved in July 2015, and officials suggested Friday's measures would not be the last.

Iran announced it would take "reciprocal action" against US individuals and companies.

"In response to the new move by the United States of America and as a reciprocal action, (Iran) will impose legal limitations for some American individuals and companies that have had a role in the creation and support of extreme terrorist groups in the region," the foreign ministry said.

It said it would publish a list of names later.