Iran plans to boost its ballistic and cruise missile capacity and acquire modern fighter planes and submarines, the Iranian state news agency IRNA quoted a senior Defense Ministry official as saying on Saturday.

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News of the military development plans came a day after Iran dismissed a French call for negotiations on Tehran's future nuclear plans, its ballistic missile arsenal and its role in wars in Syria and Yemen, following the US pullout from Tehran's nuclear agreement with world powers.

Fateh-110 ballistic missile test

State media also reported the launch earlier this week of war games involving some 150,000 volunteer Basij militia members, who vowed to defend the Islamic state against "foreign threats" including its arch foe, the United States.

Tehran is furious over US President Donald Trump's decision to withdraw from the accord on Iran's nuclear programme and re-impose sanctions on Tehran.

Senior Iranian officials have warned the country will not yield easily to a renewed US campaign to strangle Iran's vital oil exports. They say the country's missile program is solely for defense purposes and is not negotiable as demanded by the United States and European countries.

Iranian fighter jet (Photo: AFP)

"Increasing ballistic and cruise missile capacity ... and the acquisition of next-generation fighters and heavy and long-range vessels and submarines with various weapons capabilities are among the new plans of this ministry," said Mohammad Ahadi, deputy defense minister for international affairs, IRNA said.

Speaking to Tehran-based foreign military attaches, Ahadi said international sanctions had not hampered the development of Iran's arms industry.

"We have the necessary infrastructure and what we need to do is research and development, and at the same time upgrade and update the defence industry while relying on the country's very high scientific capacities and tens of thousands of graduates in technical fields and engineering," Ahadi was quoted as saying.

He also defended Iran's role in conflicts in Iraq and Syria: "If Iran and its allies in Syria and Iraq had not stopped Islamic State, today the map of the region would be different and the world would face a terrible challenge."

Separately, the head of the Defense Ministry's naval industries said Iran was developing a water jet propulsion system that would be ready by next March and a military commander said the air force planned to adopt Iran's new Kowsar fighter plane after successful tests, the semi-official news agency Tasnim reported.

Iranian President Hassan Rouhani said last month the Islamic Republic's military prowess was what deterred Washington from attacking it.

The exercises by the Basij militia, which are led by the elite Revolutionary Guards, come ahead of massive annual rallies planned for later this month to mark the start of the 1980s Iran-Iraq war.

"The motto of these war games is unity ... and to declare that, when it comes to adversity and threats from foreigners, we all join to defend the (Islamic Republic's) system," Basij commander Gholam-Hossein Gheibparvar was quoted as saying by IRNA.

"The motto of these war games is unity ... and to declare that, when it comes to adversity and threats from foreigners, we all join to defend the (Islamic Republic's) system," Basij commander Gholam-Hossein Gheibparvar was quoted as saying by IRNA.