Iran has test launched a new ground-to-ground missile as it prepares to inaugurate its first nuclear power plant.

In the latest demonstration of Iran's military capacities state TV has broadcast the test-launch of a new ground-to-ground missile.

Iran did not disclose the range of the missile, but Defence Minister Ahmad Vahidi said it had "a range of new technical characteristics with high tactical capability".

"This is a surface-to-surface missile. It does not have small directional wings, which give it tactical superiority. It has it's own tracking and targeting, and can avoid being targeted by counter-missile systems," Defence Minister Ahmad Vahidi said.

Iran would stop higher-grade enrichment if it were assured of nuclear fuel supplies for a research reactor, President Mahmoud Ahmadinejad was quoted as saying in a Japanese newspaper on Friday.

Iran's first nuclear power plant is being inaugurated later and Ahmadinejad's comments appeared to signal possible willingness to compromise on a key concern for the West regarding the Islamic Republic's nuclear programme.