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 Defence Ministry official as saying yesterday.

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.

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 programme is solely for defence purposes and is not negotiable as demanded by the United States and European countries.

"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 defence 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.

Separately, the head of the Defence 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.