News story here.

Iran launched a rocket on Monday designed to carry its first locally-made research satellite next year, showing the country's advances in ballistics at a time when Western powers are already jittery about its nuclear plans.

...President Mahmoud Ahmadinejad read out the launch countdown before it blasted off to chants of "God is greatest" by an audience of officials in a control room, state TV reported.

The technology used to put satellites into space could also be used for launching weapons, but analysts voiced different opinions about the significance of Iran's latest announcement.

...Defense analyst Andrew Brookes of the International Institute for Strategic Studies in London agreed that Iran was advancing but he said the test was nothing remarkable as the country had already developed ballistic missiles.

"We know Iran can fire missiles. This proves nothing new in terms of technology and capability," Brookes said.

Fact is that any launch system that can put a satellite into orbit can put an equivalent payload onto almost any spot on Earth. We're not talking about rockets that can only hit Israel any more. The only saving factor might be that the payload is so small that they couldn't loft anything other than the most sophisticated warheads (unlikely to be developed soon).