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The ICBM is the most powerful unit in the Civilization franchise. It has the abillity to strike anywhere on the map causing significant dammage. When used over a city, it has a dammage range of 12 squares. Inside the city, population are reduced drastically and huge dammage can be done to city improvements such as wonders or other buildings. withing 12 squares, the city is affected with pollution and radioactive waste. All the green pastures are destroyed converting the area into desert. Another hit with the ICBM on the same city can send back the city back to prehistoric age, leaving a population count of 5 or less.
Other countries can use the ICBM against you and the amout of dammage will be the same. However, the ICMB can be counteracted with the SDI_Defence. This gives you a 70%+ hit rate, destroying enemy ICBM even before they reach your city.
The use of ICBM also cause all the other civilizations to declare war on you and eventually use multiple ICBM's on you.
Tactics
During war preparations, it is recommended for the player to build a massive ammount of ICBM's, like 50 something. In case of war, you can deploy a massive nuclear war on any civilization, leaving their country basically deffenseless. Eventually, a few mech infantry or marines are good enough take control of the cities. So it is considered a better idea to concentrate all the cities into building ICBMS