Iran will test-fire two long range missiles on Monday during the last day of naval exercises in the Gulf, a naval commander said, following its threat to halt oil shipments through the Strait of Hormuz.

Today we will test-fire Qader and Nour long range missiles during the drill, deputy navy Commander Mahmoud Mousavi told state TV.

Iran has been holding the 10-day naval exercise at a time of increased tension with Western powers over its nuclear programme, and Mousavi said on Sunday it had successfully test-fired a medium range surface-to-air missile.

Tehran threatened last week to stop the flow of oil through the Strait of Hormuz if it became the target of an oil embargo over its nuclear ambitions. The European Union has said it is considering a ban - already in place in the United States - on imports of Iranian crude.

The U.S. Fifth Fleet said it will not allow any disruption of traffic in the vital oil shipping route.

The United States and Israel say they have not ruled out military action against Iran if diplomacy fails to resolve a dispute over the nuclear programme, which Tehran says is peaceful but the West believes is a cover for trying to build atomic bombs.

Iran has long-range missile systems, which could reach Israel and U.S. bases in the Middle East.

(Writing by Ramin Mostafavi; editing by David Stamp)