Iran displayed a new cruise missile with a range of 1,300 km (800 miles) on Saturday during celebrations marking the anniversary of the 1979 Islamic Revolution, state television reported.
The missile, named Hoveizeh, was displayed in a ceremony attended by Defense Minister Amir Hatami.
Iran has voluntarily limited the range of its missiles to 2,000 kilometres (1,250 miles), but that is still enough to hit Israel and U.S. bases in the Middle East. Washington and its allies have accused Tehran of pursuing enhanced missile capabilities that also threaten Europe.
With the launch of what is being called the Instrument In Support Of Trade Exchanges (INSTEX) the European Union has taken a step towards protecting some of its business assets in Iran while also keeping the now-threatened nuclear deal alive long enough to buy time for a new agreement to be reached.
General Hatami said the surface-to-surface missile could be quickly prepared for launch, can fly at low altitudes, and is highly accurate and explosive.
The Defence Ministry's website carried an undated video purportedly showing the Hoveizeh being test-fired from a mobile launcher.
The EU also expressed concern at the "growing tensions in the region and Iran's role in this context, including the provision of military, financial and political support to non-state actors in countries such as Syria and Lebanon".
Iran carried out a failed attempt to launch a satellite into space on January 15, defying a warning from Trump. It also says its missile tests are not in violation of the resolution and denies that its missiles are capable of carrying nuclear warheads.
The launch followed Washington's warning to Iran about three rocket launches it had in the works, which the U.S. insisted would violate a UN Security Council resolution.
Up to 7,000 German business enterprises are estimated to seek continued trade with Iran, says the managing director of the German-Iranian Chamber of Commerce, following the launch of a payment vehicle that enables continued European trade with the Islamic Republic irrespective of unilateral sanctions by the United States.
On the same day, the EU Council announced that it has sanctioned two individuals and one entity in relation to Iran's "hostile activities" in several European countries.
Washington withdrew from the accord in May and reimposed sanctions against Iran, citing the missile programme among its reasons. "If the Europeans, or anyone else, want to conspire to disarm Iran of missiles, we will be forced to make a strategic leap", Brig.
Salami said Iran's decision to limit the range and the number of its ballistic missiles was based on its current strategy, which could change based on circumstances.