"We know that the Iranians are always trying to improve their weapons systems by both foreign and indigenous measures," Pentagon spokesman Bryan Whitman was quoted by Tuesday's The Washington Times as saying.

"It is possible they are increasing their capabilities and making strides in radar-absorbing material and targeting," he said.

"However, the Iranians have been known to boast and exaggerate their statements about greater technical and tactical capabilities,"said the spokesman.

Nevertheless, he expressed concerns for Iran's military ability.

"Iran has the largest inventory of ballistic missiles in the Mideast," Whitman noted.

Iran on Sunday reported that its military had test-fired a high-speed underwater missile and released video footage showing the missile-torpedo hitting a target vessel.