Iterative Development Model is also know as Incremental Development Model.

In the iterative development model there are number of smaller self-contained life cycle phases for the same project. It does not contain only one large development cycle as in waterfall model.

There are many variants of Iterative Development Model.

In Iterative Development Model the delivery of software is divided into increments or builds with each increment adding new functionality to the software product.

In Iterative Development Model each subsequent increment needs testing of the new functionality, regression testing and integration testing of the new and existing functionality.

Examples of Iterative Development Model are:

Rapid Application Development(RAD)
Agile development