Hi Ajish,
I don't have access to IAR anymore, but I'm concerned you're fighting an unnecessary battle so want to try lend a hand.
The steps in the user story do produce a .a file but it would not be useful without the corresponding .h files. It sounds like maybe you're having trouble imagining how all the preparatory work helps you actually test you code.
Pay careful attention to the last part of the story - once you have the .a built, you create an AllTests.cpp file *in your project*. Don't be worried that this is a C++ file - the "Auto" project setting will happily compile your C++ tests *and* your C project source into a single executable. As mentioned, just wrap any includes of C headers from C++ tests in extern "C" and you'll be right. Once it's built, you simply execute it as if it was your project, and watch the console output.
IAR does have the concept of plugins, but I've never used them. Perhaps you could look at creating one. In any case, you'd still need to build the .a for your target to have something to link against, so it wouldn't save you much.
Heath