Eight AH-1W attack helicopters and as many OH-58D Scout helicopters were shown on television firing missiles, rockets and guns at targets in a drill simulating a Chinese invasion on a beach in western Taiwan.
M-109 self-propelled cannons and M-110 eight-inch howitzers, as well as F-16 fighters and Seagull fastboats armed with anti-ship missiles were mobilized in the exercise, which is part of Taiwan's biggest annual manoeuvres codenamed "Han Kuang 20" (Han Glory).
Last week around 5,000 troops took part in exercises on the south coast simulating an attempt to repel a beach landing.
Two air force Mirage 2000-5 jets also landed on major freeways in an exercise to "review the air force's capability in using freeways for emergency landings and logistic support in case of war."
The exercises come amid growing tensions with China.
New Defense Minister Lee Jye said all the armed forces' various strategies needed to be "verified" through drills, which will climax when President Chen Shui-bian presides over major wargames slated for August 25 in southern Pingtung county.
Separately, Chen will Thursday visit Taiwan's two Dutch-built Sword Dragon-class submarines during a cruise off the main naval base in Tzuoying, in southern Kaohsiung county, the navy said.
Some parliamentarians criticized the high-profile visit as provocative at this juncture, but others said it was aimed to underscore the importance of the eight conventional submarines the United States has offered to sell to Taiwan.
The submarine deal is at the heart of a controversial special budget of 610 billion Taiwan dollars (18.2 billion US) to buy advanced weaponry, including modified Patriot anti-missile systems and anti-submarine aircraft, over a 15-year period from 2005.
The draft budget is pending parliament's final approval.
The navy says the submarines are critical to counter China's naval buildup.
Taiwan's display of military muscle comes after the China News Service said Monday China had held a military exercise in its southeastern province of Fujian as part of stepped up preparedness for conflict with the island, which it regards as part of its territory.
More than 3,000 troops took part in the war games.
Large scale joint sea, land and air drills on Dongshan Island, 150 nautical miles west of Taiwan, are also imminent, Hong Kong's pro-Beijing Wen Wei Po daily had said.
The holding of the drills by Taiwan and China -- still technically at war despite their commencement of civil contacts in 1987 -- has sparked concerns from the United States and calls for restraint.
But ruling Democratic Progressive Party lawmaker Lee Wen-chung played down concerns.
"These are all routine manoeuvres. I don't see the possibility of imminent war at this moment," Lee said.
Since pro-independence President Chen Shui-bian was re-elected in March, Beijing has stressed its long-standing vow to take Taiwan by force should the island try to declare formal independence.
The two sides split in 1949 after a civil war.