TEHRAN (Reuters) - Iran test-fired a new medium-range missile, designed to evade radars, on Sunday during the last days of its naval drill in the Gulf, the official IRNA news agency quoted a military official as saying. The 10-day naval exercise coincided with increased tension in Iran's nuclear row with Western powers, after the European Union said it was considering a ban - already in place in the United States - on imports of Iranian oil. "The mid-range surface to air missile which is equipped with the latest sophisticated anti-radar technologies has been successfully test-fired," Deputy Navy Commander Mahmoud Mousavi told IRNA. Iran delayed testing its long-range missiles during the drill, saying the weapons would be launched in the next few days. The United States and Israel say they have not ruled out military action against Iran if diplomacy fails to resolve a dispute over the country's nuclear program, which Tehran says is peaceful but the West says is a cover to build bomb. Iran has long-range missile systems including the Shahab-3, which could reach Israel and U.S. bases in the Middle East. In the past week Iran has threatened to stop ships moving through the strategic Strait of Hormuz if sanctions are imposed on its oil exports. The threat has heightened tension between Iran and the West. The U.S. Fifth Fleet said it will not allow any disruption of traffic in the vital oil shipping route.