Iran on Monday said that a home-built rocket sent into space in a move that triggered US concern over possible military use will be able to take a satellite into low orbit around the earth.

Defence Minister Mostafa Mohammad Najjar also vowed that Iran will soon put its own satellite into orbit, after a dummy was sent into space in Monday's rocket launch.

The development was likely to add to international concerns about Iran's nuclear programme, which Western nations fear could be a cover for ambitions to build the atomic bomb although Tehran insists its aims are peaceful.

State television said the Safir (Ambassador) rocket is capable of putting a "light satellite into low earth orbit" between 250 and 500 kilometers above the earth.

It showed footage of the rocket launch, saying that the Safir is about 22 meters long, with a diameter of 1.25 metros and weighing more than 26 tonnes.

Iran's most powerful military missile, the Shahab-3, has a diameter of 1.30 MITREs and measures 17 MITREs in length.

Sunday's launch raised concerns in Washington that the rocket technology could be diverted to military use.

"The Iranian development and testing of rockets is troubling and raises further questions about their intentions," White House spokesman Gordon Johndroe said.

"This action and dual use possibilities for their ballistic missile programme have been a subject of International Atomic Energy Agency (IAEA) discussions and are inconsistent with their UN Security Council obligations," he said, referring to the UN nuclear watchdog, the IAEA.