"Iran still has a long way to go as far as satellites are concerned and it deliberately exaggerates its air and space successes in order to dissuade Israel or the United States from attacking its nuclear sites," Yitzhak Ben Israel told public radio.

"It is clear that for years Iran has had Shihab-3 ballistic missiles which put Israel within its reach. But the threat posed by Iran comes from its nuclear programme and not from its satellites or ballistic missiles," said Ben Israel, who is also a member of parliament with the governing Kadima party.

Tehran said on Sunday it had sent a home-built rocket carrying a dummy satellite into space.

The White House expressed concern over the announcement because such technology could also be used for ballistic missiles.

Sunday's development came amid an international standoff over Tehran's long-standing refusal to suspend uranium enrichment, a process which makes nuclear fuel but also the core of an atomic bomb.

Israel, the region's sole if undeclared nuclear armed power, considers Iran its greatest threat.

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