The system was displayed as part of a military parade held in Tehran on Friday to mark Sacred Defense Week and the 32nd anniversary of the Iraq-Iran war.
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Military attachés from over 40 countries attended the event.
According to the semi-official Fars news agency, "Raad," or "Thunder," is based on Russian-made S-200 long-range missiles, but now also carries "Taer 2" ("Bird" 2) missiles, which are domestically produced by the Revolutionary Guard.
The system is said to be able to intercept threats at a range of up to 50 kilometers, with the capability of hitting targets at 22,000 meters.
Iranian officials said it is "designed to confront fighter jets, cruise missiles, smart bombs, helicopters and drones."
At Friday's parade in Tehran, General Ami Ali Hajizadeh, who heads the Revolutionary Guard's airspace division, warned that the system was ready in case of an attack on Iran.
"The Raad air defense system is the first completely indigenous system of the Sepah (IRGC), which has been designed and manufactured by committed Iranian technicians in the struggle for self-sufficiency. The system has been manufactured with the aim of confronting (hostile) US aircraft," Hajizadeh stated.
Iranian President Ahmadinejad and his military chiefs
"The system has been optimized in detection fields and electronic warfare," Brigadier General Farzad Esmayeeli, commander of the Khatam ol-Anbia Air Defense Base, said. "Two new types of missiles will be mounted onto the system," he added.
Fars further quoted Esmayeeli as saying that the system is meant to intercept long range, medium-to-high altitude surface-to-air missiles and can defend large areas from "strikes or other strategic aircraft."
Also on display at the parade were Iran's Sajjil-2 and Ghadr F-1 missiles, which have a range of about 2,000 kilometers and are therefore capable of reaching Israel, US bases in the Persian Gulf and parts of southern Europe.
The military display comes amid growing tensions between the West and Tehran, over the latter's refusal to suspend its nuclear program.
Iranian President Mahmoud Ahmadinejad, who attended the parade, defended Iran's right to pursue a nuclear program: "Let's the world know that Iran's great nation will defend its rights, implementation of justice and well as human dignity," he said.
Iran's chief of staff, Gen. Hassan Firouzabadi, said Friday that the Islamic Republic was not threatened by the allies' drill, describing it as a "refreshment" exercise for naval forces "that have not moved for months."
AP contributed to this report
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