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Iran's arms program is far in excess of its defense needs and its missiles could eventually target Europe, according to a U.S. military commander.

Gen. Binford Peay, commander in chief of the U.S. Central Command, was quoted as saying in Wednesday's issue of Jane's Defense Weekly that Iran's neighbors are increasingly worried about Tehran's intentions.On Tuesday, Secretary of State Warren Christopher described Iran as the main sponsor of international terrorism and rebuked America's European allies over their continuing refusal to cut trade links with it.

"It provides them with money, several million dollars a year in the case of Hamas, Islamic Jihad and others, and up to $100 million a year in the case of Hezbollah," Christopher said.

Iran denies that it supports terrorism. It says the world community should differentiate between people struggling to liberate occupied lands, as in the West Bank and south Lebanon, and those who have embarked on terrorism.

Peay was quoted in the London-based magazine as saying that the pace of Iran's recent modernization efforts in naval capabilities, missile acquisition and weapons of mass destruction is well beyond what it needs to defend itself.

"Clearly, every senior leader - civilian or military - emir, king or chief of service that I talk to in the Gulf today describes Iran as the long-term threat," he was quoted as saying.

In the May 1 issue of the magazine, Peay said the United States has uncovered evidence that Iran is building tunnels near its southern coast capable of housing long-range ballistic missiles.

Peay said that scientists from the former Soviet Union now working in Iran are expected to extend the range of Iran's Scud missiles. "I have to believe that over time Iran can do that," he said.

Peay said the eventual result would be that Iran could have missiles capable of targeting Europe - 1,500 miles away.

At present, Iran's Scud-B missiles have a range of 190 miles. Its Scud-Cs have a range of 310 miles.