The military exercise, staged in the northeastern Ilan county and codenamed "Han Kuang 19" (Han Glory), was aimed at fully illustrating the defense capability of Taiwan's armed forces, the defense ministry said.

"The all-out defense forces in Ilan area are deployed to simulate the People's Liberation Army's tactics and operational schemes of cross-Strait operations," the ministry said.

China has repeatedly threatened to invade Taiwan should the island declare independence or indefinitely postpone reunification with the mainland.

Military officials said nearly all the modern weaponry Taiwan owns was mobilized in the 110-minute drill which was presided over by President Chen Shui-bian and televised live nationwide.

The army kicked off the drill by firing two Hawk surface-to-air missiles in response to a simulated attack by enemy aircraft.

One Standard surface-to-air missile was launched from a naval warship, while a fleet of jet fighters, including French-made Mirage 2000-5s, US-made F-16s, and locally made Indigenous Defensive Fighters, scrambled to intercept the imaginary invaders, firing air-to-air missiles.

Taiwan's military authorities also unveiled a locally-designed "stealth" missile boat when a Hsiungfeng II ship-to-ship missile, designed with a range of 150 kilometers (90 miles), was launched from the 170-tonne vessel.

Analysts said the boat, designed to reduce the reflection of radar waves, may be able to "passively" receive intelligence collected by other Taiwan warships, enabling the fleet to launch missile blitzes against enemy warships without exposing their location.

Each missile boat, designed to cruise at a maximum speed of 33 knots per hour, will be armed with four Hsiungfeng II missiles.

The navy plans to build 30 such missile boats under the "Kuanghwa Six Project."

The fleet is to replace dozens of aging 50-tonne Seagull missile boats, each of which is fitted with two 40-kilometer range Hsiungfeng I missiles.

Taiwan's defense ministry warned last week that China would be capable of mounting a successful attack on Taiwan after 2008 if the island did not strengthen its defensive capabilities.

WAR.WIRE