Iran's navy began a 10-day drill Saturday in international waters near the strategic oil route that passes through the Strait of Hormuz.
The exercises, dubbed "Velayat 90," could bring Iranian ships into proximity with U.S. Navy vessels in the area.
The war games cover a 1,250-mile (2,000-kilometer) stretch of sea off the Strait of Hormuz, northern parts of the Indian Ocean and into the Gulf of Aden, near the entrance to the Red Sea, state TV reported.
The drill will be Iran's latest show of strength in the face of mounting international criticism over its controversial nuclear program, which the West fears is aimed at developing atomic weapons. Tehran denies those charges, insisting the program is for peaceful purposes only.
Navy chief Adm. Habibollah Sayyari said Iran is holding the drill to show off its prowess and defense capabilities.
"To show off its might, the navy needs to be present in international waters. It's necessary to demonstrate the navy's defense capabilities," state TV quoted Sayyari as saying.
The Strait of Hormuz is of strategic significance as the passageway for about a third of the world's oil tanker traffic. Beyond it lie vast bodies of water, including the Arabian Sea and the Gulf of Aden. The U.S. Navy's Bahrain-based Fifth Fleet is also active in the area, as are warships of several other countries that patrol for pirates there.
Both the U.S. and Israel have not ruled out a military option against Iran over its nuclear program. Iranian hard-liners have come out with occasional threats that Tehran would seal off the key waterway if the U.S. or Israel moved against the country's nuclear facilities.
Iran regularly holds war games and has also been active in fighting piracy in the Gulf of Aden.
Sayyari said submarines, surface-to-sea missile systems, missile-launching vessels, torpedoes and drones will be employed in the maneuvers.