"They wanted us to know, they wanted the Europeans to know, and they wanted the Iranians to know," a Pentagon official is quoted as saying by the newspaper.

"There's a lot of signalling going on at different levels."

The exercise involved Israeli helicopters that could be used to rescue downed pilots, the newspaper reported.

The helicopters and refuelling tankers flew more than 1,400km (870 miles), roughly the distance between Israel and Iran's main uranium enrichment plant at Natanz.

The New York Times reported that Israeli officials declined to discuss the details of the exercise.

A spokesman for the Israeli military said the air force "regularly trains for various missions in order to confront and meet the challenges posed by the threats facing Israel".

The US state department would not comment on the Israeli exercise.

A spokesperson said the US was focused on making diplomacy work with Iran but insisted that all options were still on the table, echoing remarks made recently by President George W Bush.

Diplomats in Washington described the exercise as muscle flexing, a message that Israel would be ready to take unilateral action against Iran if needed, our Washington correspondent says.

But they add that if Israel ever decides to strike, there will be little advance warning- just like when it targeted a suspected nuclear reactor in Syria last September and Iraq's nuclear plant in Osirak in 1981.

Warnings

Israeli Prime Minister Ehud Olmert warned on 4 June that drastic measures were needed to stop Iran obtaining nuclear weapons.

He said Iran must be shown there will be devastating consequences if it did develop such weapons.

Israeli deputy Prime Minister Shaul Mofaz - a former defence minister - said earlier this month that military strikes to stop Iran developing nuclear weapons looked "unavoidable".

In 1981, Israeli jets bombed the Iraqi nuclear reactor at Osirak, 30km (18 miles) outside Baghdad.

Israel said it believed the French-built plant was designed to make nuclear weapons that could be used against Israel.