The Kilos are best known as competent littoral fighters, with good mine laying capacity.
The Kilo Class (Project 877) submarine was designed for anti-submarine and anti-ship warfare in the protection of naval bases, coastal installations and sea lanes, and also for general reconnaissance and patrol missions...As of early 1998 construction of the Project 877EKM submarines was nearly completed, with only one submarine left under construction in St.Petersburg for the Indian Navy. Russia exported 21 Project 877 and 636 submarines, including: India - 10, and China - 4, Iran - 3, Algeria - 2, Poland - 1, Romania - 1.Source: here
On 04 August 1993, Iran took delivery of a second Russian Kilo-class diesel submarine, and the third arrived 18 January 1996. Russia went ahead with the first two deliveries despite vigorous US protests. In response to Administration pressure and US sanctions legislation, Russia formally pledged in June 1995 not to enter any new arms contracts with Iran, although prior arms contracts could be implemented.
Update: The reason I find it interesting is that an Iranian Kilo so far from home waters may mean support for the Syrians in case the U.S. brings in heavy ships in support of the Lebanon. They are not noted for having long legs -with about 45 days of endurance.
Update2: UAV Blog reported in November 2004 that Iran supplied 8 UAVs to Hizballah here.
Update3: Bubblehead in the comments below properly points out that DEBKAfile was expressing its doubt about the sub in question being Iranian. My use of the word "assertion" was simply incorrect and should have more properly set out the fact that the sources cited by DEBKA were actually discounting that possibility.
Our military sources, speculating on its identity, doubt that the submarine was one of the three Russian-made 3,000-ton Kilo subs known to belong to the Iranian navy. They are 72 meters long, have a crew of 52 and are capable of navigating the Mediterranean. But to reach Israeli waters would take Iranian sub at least a couple of weeks. It would have to sail around the Cape of Good Hope and through the Straits of Gibraltar. Although capable of voyaging for 45 days, such a sub would need to drop anchor en route to take on fresh supplies, so exposing itself to Western or Israeli intelligence surveillance.
It is far more likely that the unidentified sub was Western and came close to the Israeli coast to find out what caused the failure of Israel’s early warning systems to catch the flying invader two days earlier and see if Israel had plugged the hole in its radar. The sub would also have been instructed to see if the Patriot battery had been repositioned - or perhaps different kinds of electronic tracking and interception devices. After collecting some answers, the sub headed out.