It was unclear what actions the new Republican administration might take to try to rein in Iran for a missile launch that President Donald Trump and his top aides considered defiance of a nuclear deal negotiated in 2015 by then Democratic president Barack Obama.
The tough talk committed the administration to back up its rhetoric with action, experts said.
No comment on military response
Officials declined to say whether the military option was on the table, although Pentagon spokesman Christopher Sherwood said "the U.S. military has not changed its posture in response to the Iranian test missile launch" on Sunday.
A fiery statement from Trump's national security adviser, Michael Flynn, marked some of the most aggressive rhetoric by the administration that took power on Jan. 20, making clear that Obama's less confrontational approach toward Iran was now over.
Flynn said that, instead of being thankful to the United States for the nuclear deal, "Iran is now feeling emboldened."
"As of today, we are officially putting Iran on notice," he told reporters in his first appearance in the White House press briefing room.
Later Wednesday, Trump tweeted: "Iran is rapidly taking over more and more of Iraq even after the U.S. has squandered three trillion dollars there. Obvious long ago!"
Iran is rapidly taking over more and more of Iraq even after the U.S. has squandered three trillion dollars there. Obvious long ago!— @realDonaldTrump
Flynn said the launch and an attack on Monday against a Saudi naval vessel by Iran-allied Houthi militants off the coast of Yemen underscored "Iran's destabilizing behaviour across the Middle East."
Iran confirmed it had tested a new missile but said it did not breach a nuclear accord reached with world powers or a UN Security Council resolution that endorsed the pact.
Analysts said Iran could interpret Flynn's warning as bluster given that the Trump administration is still formulating a response.
"They do sound like they are trying to tamp down any sense of imminent action," said Suzanne Maloney, an Iran expert at the Brookings Institution think-tank in Washington. "In which case, it makes little sense to send the national security adviser out there because it could be interpreted by Iran as bluffing."
The warning could foreshadow more aggressive economic and diplomatic measures against Iran.
Three senior U.S. officials, speaking on condition of anonymity, said a range of options, including economic sanctions, was being considered and that a broad review was being conducted of the U.S. posture toward Iran.
One official said the intent of Flynn's message was to make clear the administration would not be "shy or reticent" toward Tehran.
'Our sincere hope is that the Iranians will heed this notice today and will change their behaviour.' -Michael Flynn, U.S. national security adviser
"We are in the process of evaluating the strategic options and the framework for how we want to approach these issues," the official said. "We do not want to be premature or rash or take any action that would foreclose options or unnecessarily contribute to a negative response."
"Our sincere hope is that the Iranians will heed this notice today and will change their behavior," he said.
Iran has test-fired several ballistic missiles since the nuclear deal in 2015, but the latest test was the first since Trump became president.
Comment could backfire
The issue came to the forefront on the same day that the Senate confirmed former Exxon Mobil Corp chief executive Rex Tillerson as secretary of state. Simon Henderson, a Gulf expert at the Washington Institute for Near East Policy, said there was a danger of a miscalculation by either side.
"The question now is will the Iranian logic be: 'My goodness, this guy is serious, we'd better behave ourselves,'" he said. "Or do they say, 'Why don't we tweak him a bit more to see what he really means, maybe test him.'"
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Richard Nephew, a former Obama administration official who was a U.S. negotiator with Iran on the deal, said Flynn's comment could backfire.
"I think this will create an impetus for the Iranians to 'resist' and 'defy' more, and that could well create an escalatory cycle with Iran," he said. "Being tough with Iran is one thing, but you have to back it up and bring partners with you. Is Flynn prepared to deal with what comes from that?"
Trump's tough talk
Trump has frequently criticized the Iran nuclear deal negotiated by the Obama administration, calling the agreement weak and ineffective.
While campaigning in September, then candidate Trump also vowed that any Iranian vessels that harass the U.S. navy would be "shot out of the water" if he is elected.
Trump and Saudi Arabia's ruler, King Salman, spoke by phone on Sunday and were described by the White House as agreeing on the importance of enforcing the deal and "addressing Iran's destabilizing regional activities."
Sunni Muslim-dominated Saudi Arabia, home to Mecca and other Islamic holy sites, and Shia Muslim-majority Iran are regional rivals.
A section of UN Resolution 2231 calls on Iran "not to undertake any activity related to ballistic missiles designed to be capable of delivering nuclear weapons, including launches using such ballistic missile technology."