In deterring the "attack," Taiwan armed forces showcased sophisticated weaponry during an hour-long, live-fire exercise near the northeastern Suao harbour.

The forces for the first time tested the power of a US-made Standard II air defence missile, which was launched from a Kidd-class destroyer to eliminate a target.

The surface-to-air missiles have a range of 144 kilometres (90 miles) and vastly outperform the Standard I missiles deployed on Taiwan's Perry-class frigates.

A French-made Mirage 2000-5 fighter released flares in a standard operation to duck possible missile attacks after it fired a Magic missile to hit a drone -- a pilotless airplane used as a mock enemy plane.

The army also fired home-made Hsiungfeng (Brave Wind) II and US-made Sparrow missiles from land bases.

"The objective of the drill was to test the joint operation capabilities of army, navy and air force," army Major General Hsu Yen-pu told reporters at the end of Wednesday's drill involving more than 1,800 people, 28 fighters, a submarine, a destroyer, two frigates and four missile boats.

In another operation later in the day, hundreds of troops flanked by tanks and armoured vehicles surrounded a group of mock Chinese soldiers who had "seized" the central Taichung harbour.

"Holding several drills on the same day is in response to advice of American military personnel" who had witnessed the island's previous military manoeuvres, said defence ministry spokesman Major General Wu Chi-fang.

"Only in so doing can the military truly find out problems and see to it that they be corrected in daily training programmes," Wu said.

More than 120,000 soldiers and 23,000 reservists were to be mobilised during what Wu described as Taiwan's "biggest and most extensive" wargames, which began Monday.

In an apparent reaction to China's rapid military expansion, the United States has quietly increased its military contacts with Taiwan over the past few years despite Beijing's objections.

On Tuesday, six Taiwanese fighter jets made rare landings on a closed-off freeway in an exercise aimed to find out how the air force could preserve its combat readiness should the island's air bases be severely damaged in an attack by Beijing.

A computerised drill last month showed the island was vulnerable to air attack from its rival neighbour due to a shortage of anti-missile weaponry, Taiwan's defence ministry said.

Some analysts allege that the military exercises are for publicity purposes rather than a review of the island's defences.

China has repeatedly threatened to invade self-governing Taiwan should the island declare formal independence. It regards Taiwan as part of its territory awaiting reunification since they split in 1949 at the end of a civil war.

Tensions between Taiwan and China have escalated since independence-leaning Chen Shui-bian was elected president in 2000. He was narrowly re-elected in 2004.

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