Iran has successfully test-fired a faster version of a medium-range missile, drawing criticism from the international community.
The improved Sejil 2 missile can reportedly hit targets 1,250 miles away - putting it in reach of Israel as well as US bases in the Gulf, and south-east Europe.
The US said the move, which follows earlier testing in May, only worked to "undermine Iran's claims of peaceful intentions".
National Security Council spokesman Mike Hammer said: "Such actions will increase the seriousness and resolve of the international community to hold Iran accountable for its continued defiance of its international obligations on its nuclear programme."
Gordon Brown immediately condemned the missile test and warned Iran it faced tougher sanctions.
The Prime Minister discussed the development when he met UN Secretary General Ban Ki-moon at climate change talks in Copenhagen.
He said: "This is a matter of serious concern to the international community and it does make the case for us moving further on sanctions.
"We will treat this with the seriousness it deserves."
Neither Israel nor the US have ruled out military action if diplomacy fails to resolve the row over Iran's nuclear programme.
Iran's President Mahmoud Ahmadinejad has vowed to retaliate in the event of any attack.
Concern increased this week after a document emerged suggesting Iran was working on testing a key nuclear bomb part.
The Times newspaper said it had obtained notes describing a four-year plan to test a neutron initiator, the component of a nuclear bomb that triggers an explosion.
Experts believe the documents are the strongest indicator yet of a continuing nuclear weapons programme in Iran.
The technical document describes the use of a neutron source, uranium deuteride, the Times said, which is feared to have no possible civilian or military use other than in a nuclear weapon.
Uranium deuteride is reportedly the material used in Pakistan's bomb, from where Iran obtained its blueprint.
Last month, Iran unveiled plans to build 10 new uranium enrichment plants in breach of UN resolutions.
The announcement came just two days after Tehran was censured by the international community over its existing nuclear activities.