* Exercise coincides with rising tension in nuclear dispute
* US pursues diplomacy, says military action cannot be ruled out
TEHRAN: Iran's Revolutionary Guards successfully deployed a new speedboat capable of destroying enemy ships as war games began on Thursday in a waterway crucial for global oil supplies, Iranian media reported.
The Islamic Republic, which is locked in a dispute with the West over its nuclear activities, often announces advances in its military capabilities in an apparent bid to show its readiness for any attack by Israel or the United States.
On Wednesday, the Pentagon said US military action against Iran remained an option even as Washington pursues diplomacy and sanctions to halt the country's atomic activities.
Iranian media said naval, air and ground units of the elite Guards force would take part in the three-day exercise in the Gulf and the Strait of Hormuz. About 40 percent of the world's traded oil leaves the Gulf region through the strategic narrows.
'Asymmetric warfare': Western military analysts say Iran may resort to "asymmetric warfare" if it comes under attack, for example by deploying swarms of speedboats to disrupt enemy operations in the Gulf.
State broadcaster IRIB said the Guard put into operation for the first time its "smart and unique" Ya Mahdi vessel.
"The radar-evading, high-speed Ya Mahdi vessel is able to track and target the enemy's surface vessels in a smart way and destroy them," it said, adding it was now being mass produced.
A spokesman for the manoeuvres, Ali-Reza Tangsiri, said Ya Mahdi was a remote-controlled vessel whose missiles could blow 7-metre holes in any enemy ship. State Press TV said the Guards' exercise in the Gulf would show off Iran's defensive capabilities and its determination to maintain security in the region.
The ILNA news agency said more than 300 various high-speed vessels took part in the drill, equipped with missiles and rockets and carrying Guards commandos.
"These vessels are regarded as the enemy's nightmare," ILNA said.
A hypothetical enemy war ship that had entered Iran's territorial waters was targeted, seized and destroyed, it said.
Theodore Karasik, research director at the Institute for Near East and Gulf Military Analysis, said the use of swarms of speedboats can be an "effective tool" against the enemy.
"It plays to their strengths. What they are trying to do (in case of conflict) is deny and deter access to the strait and surrounding areas," Karasik told Reuters in Dubai.
"However, the US and other navies know how to counter this," he said.
Rising tensions: The drills coincided with rising tension between Iran and the West, which fears Tehran's nuclear programme is aimed at developing bombs. Iran denies the charge.
The United States is pushing for a fourth round of UN sanctions on Tehran over its refusal to halt sensitive nuclear activities as demanded by the UN Security Council, including proposed moves against members of the Guards.
Israel, widely believed to have the Middle East's only atomic arsenal, has described Iran's nuclear programme as a threat to its existence.
Iran, a predominantly Shia Muslim state, has said it would respond to any attack by targeting US interests in the region and Israel, as well as closing the Strait of Hormuz. reuters
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