An air defence test triggered a loud explosion near Iran's Natanz uranium enrichment facility Saturday as nuclear talks with major powers stumble.

The explosion was heard in the skies over the Iranian city of Badroud, just 20 kilometres (12 miles) from the nuclear plant, the official IRNA news agency reported.

"Badroud residents heard the noise and saw a light which showed an object had just blown up in the skies over the city," a witness told IRNA.

But the air defence commander for the Natanz region told state television there was no cause for concern.

"An hour ago, one of our missile systems in the region was tested to assess the state of readiness on the ground, and there is nothing to fear," the commander said.