TEHRAN: Iran Monday test-fired a surface-to-surface cruise missile Monday during a drill near the Strait of Hormuz, underlining its threats to close the vital oil-transit waterway as the West readies to impose more economic sanctions over Tehran’s nuclear drive.

The launch of the missile took place on the final day of war games in waters east of the strait at the entrance to the Gulf, said navy spokesman, Commodore Mahmoud Mousavi.

The United States, which keeps its Fifth Fleet based in the Gulf, has warned it will not tolerate a closure of the strategic channel.

France said Monday that the tests were a “very bad signal to the international community” and stressed that “freedom of navigation” through the Strait of Hormuz must be maintained.

“We regret the very bad signal sent to the international community by the latest missile tests announced by Iran,” Foreign Ministry spokesman Bernard Valero said, reminding Tehran of the “freedom of navigation in straits and the need to maintain a favorable climate in respect to this freedom.”

Israeli Defense Minister Ehud Barak, meanwhile said the Iranian wargames were a sign of the regime’s “distress” in the face of sanctions.

“We saw reports about the large Iranian drill near the Strait of Hormuz today, which included missile firings,” Barak told members of his Atzmaut [Independence] faction.

“To my mind, this reflects first and foremost Iran’s distress in the wake of the tightening sanctions, including recent deliberations around sanctions on oil export and the possibility of sanctions on the central bank,” he said.

“I doubt Iran can afford to seriously consider closing the Strait of Hormuz, even in the scenario of tighter sanctions,” Barak said. “Such a move would turn the entire world against it. In their distress, the Iranians are exhausting their pool of threats, in what is also an attempt to deter the world from further sanctions.”

The missile, called Qader, was described as an upgraded version of a missile that has been in service before. Mousavi said the Qader cruise missile “built by Iranian experts successfully hit its target and destroyed it,” according to the official IRNA news agency.

He said it was “the first time” a Qader missile had been tested.

Hours later a Nasr missile “was also fired from a vessel in the sea,” he told state television, adding that its test, too, was successful.

IRNA and other outlets later said the third missile, Nour, was test-fired late Monday and also hit its target.

The Nour and the Nasr are based on Chinese missiles, while the Qader is said to be built entirely in Iran.

The other missiles Iran tested Monday can fly a maximum 200 km, generally considered short-range though Iranian media and Mousavi described Qader as a “long-range” weapon.

The show of military muscle was designed to show Iran’s ability to close the Strait of Hormuz through which 20 percent of the world’s oil flows.

Iranian political and military officials insist they could take that drastic step if the West imposes more sanctions, on top of others that have already taken their toll on Iran’s oil-dependent economy.The United States and its allies have imposed their sanctions to punish Iran for maintaining a nuclear program they believe masks military objectives.

Tehran denies the allegation, saying its nuclear activities are exclusively for energy generation and for making medical isotopes.

In another show of defiance, Iran’s atomic energy organization said on the weekend its scientists had tested “the first nuclear rod produced from uranium ore deposits inside the country.”

U.S. President Barack Obama upped the pressure on Tehran last Saturday, signing into law new unilateral sanctions targeting Iran’s central bank and financial sector.

The European Union is considering an embargo on Iranian oil imports. A meeting of EU foreign ministers at the end of this month will decide whether to implement that measure.

Valero said talks in the European Union on an embargo on Iranian oil imports “are progressing well.”

Iran’s currency was showing the impact of the sanctions, slumping more than 12 percent in street trading Monday, accelerating a weekend slide triggered when Obama activated the new U.S. sanctions.

The U.S. measures seek to further squeeze Iran’s crucial oil revenues, most of which are processed by the central bank.

Analysts are skeptical, however, that Iran will make good on its threat over the Strait of Hormuz if sanctions bit harder.

Some noted that Iran would devastate its economy if it did so, likely lose the diplomatic protection it enjoys from Russia and China, and risk open war with the U.S.