WASHINGTON (AP) - Democratic presidential candidate Barack Obama said Wednesday that Iran's missile tests highlight the need for direct diplomacy as well as tougher threats of economic sanctions and strong incentives to persuade Tehran to change its behavior.

John McCain, the Republican seeking the presidency, said the tests demonstrate a need for effective missile defense, including missile defense in Europe and the defense system the U.S. plans with the Czech Republic and Poland.

"Working with our European and regional allies is the best way to meet the threat posed by Iran, not unilateral concessions that undermine multilateral diplomacy," McCain said in a statement

Obama has been criticized by Republicans for being too eager to engage enemies of the U.S. in talks. Asked how he would respond to the missile tests if he were president, Obama said he would confer with his national security team to find out whether "this indicates any new capabilities on Iran's part."

"At this point, the report is unclear, it's still early," Obama said on "The Early Show" on CBS. "What this underscores is the need for ... a clear policy that is putting the burden on Iran to change behavior. And frankly, we just have not been able to do that the last several years, partly because we're not engaged in direct diplomacy."

Obama said he continued to favor an incentive package that is aimed at getting Iran to drop its nuclear ambitions.

Iran's state-run television reported Wednesday that the government had tested nine long- and medium-range missiles, including a new version of the Shahab-3 missile that has a range of 1,250 miles and is armed with a 1-ton conventional warhead. A missile with that range could strike Israel, Turkey, the Arabian peninsula, Afghanistan or Pakistan.

An Iranian military official said the missile tests would show Iran's enemies its "resolve and might." In June, Israel conducted military exercises largely seen as a potential test for a strike against Iranian nuclear facilities.

McCain said Iran's missile tests "demonstrate again the dangers it poses to its neighbors and to the wider region, especially Israel."

"Ballistic missile testing coupled with Iran's continued refusal to cease its nuclear activities should unite the international community in efforts to counter Iran's dangerous ambitions," McCain said.

Obama, while calling Iran a threat, criticized the Bush administration for using bellicose language against the Iranian government while increasing exports to the country.

The Associated Press reported Tuesday that U.S. exports to Iran grew more than tenfold under President Bush in spite of his criticism of its government as a sponsor of terrorism and warnings against any efforts to develop a nuclear weapon.

"It's that kind of mixed signal that has led to the kind of situation that we're in right now," Obama said on ABC's "Good Morning America."