NICOSIA, Cyprus (AP) _ Iran on Monday commissioned the Persian Gulf's first submarine, tilting the region's balance of naval power.

Tehran has been spending billions on weapons and is reviving its revolutionary militancy.

Tehran Radio, monitored in Nicosia, said the Russian-built sub was named Taregh, after a famous Muslim warrior, at a ceremony at the Bandar Abbas naval base in the southern gulf.

Rear Adm. Abbas Mohtaj, the deputy commander of the navy, was quoted as saying that Iran ''gives itself the right to acquire equipment that raises and strengthens its defensive base.''

The Taregh was the first of two submarines to be delivered by Russia under a $750 million deal, over U.S. objections. The second sub is under construction, and Tehran has an option for a third.

Earlier this month, the USS Topeka, a nuclear-powered submarine armed with torpedoes and Tomahawk cruise missiles, entered the gulf with the declared purpose of routine maintenance. But it was widely believed to be there to monitor the Iranian submarine, a Kilo class, diesel-electric vessel.

Tehran had long sought to acquire a submarine to bolster its ambition to be the dominant military power in the region.

Over the past few years, Iran has also spent an estimated $7 billion on MiG-29 interceptors, Sukhoi ground attack aircraft, tanks and missiles.

The acquisition of the submarines is seen by some analysts as part of a series of moves designed to give Tehran greater control over the Strait of Hormuz. Twenty percent of the world's oil supplies pass through the waterway, the only gateway to and from the gulf.

The submarine purchase was first disclosed by the commander of the navy, Rear Adm. Ali Shamkhani, in June 1990. He said the subs would be based at the Chah Bahar naval base on the Gulf of Oman coast, 65 miles west of the border with Pakistan, in the deeper waters of the Arabian sea.

The vessel's main armament is 18 torpedoes. But Shamkhani said the submarines would be equipped with missile launchers purchased from Eastern and Western countries.

Jane's Defense Weekly, published in London, said last week that British warships that spotted the sub off the coast of Yemen believe it probably is equipped to launch surface-to-air missiles.

That would make the Iranian vessel superior to Kilo-class subs operated by Poland, Romania, India and Algeria.

Iran bought infrared guided Sa-16 missiles from Moscow two years ago.

Tehran's arms buildup comes amid a low point in relations with much of the Arab world.

Egypt has accused Iran of backing Muslim fundamentalists who are attacking tourists in an effort to hurt Cairo's major source of income.

Algeria this month downgraded ties with Tehran to a ''symbolic level,'' alleging that the Iranians are financing Muslim extremists in that country.

The resurgence of fundamentalist fervor in Iran appears to have overturned efforts by President Hashemi Rafsanjani, the leader of the country's so-called pragmatists, to restore Tehran's relations with the West and end its isolation.

Radical fundamentalists claim Rafsanjani's policies failed to earn international good will.