US President Donald Trump warned Monday that Iran is "playing with fire" after Tehran said it exceeded a limit on enriched uranium reserves under a 2015 nuclear deal abandoned by Washington.
Israel urged European states to sanction Iran, while Russia voiced regret but said the move was a consequence of US pressure, which has pushed the deal towards collapse.
Britain called on Tehran "to avoid any further steps away" from the landmark deal, and the UN said Iran must stick to its commitments under the accord.
"Iran has crossed the 300-kilogram limit based on its plan" announced in May, Foreign Minister Mohammad Javad Zarif told semi-official news agency ISNA.
But he also said the move could be reversed.
"They know what they're doing. They know what they're playing with and I think they're playing with fire," Trump told reporters at the White House when asked if he had a message for Iran.
The United States withdrew from the nuclear deal last year and hit Iran's crucial oil exports and financial transactions as well as other sectors with biting sanctions.
Tehran, which has sought to pressure the remaining parties to save the deal, announced on May 8 it would no longer respect the limit set on its enriched uranium and heavy water stockpiles.
It threatened to abandon further nuclear commitments unless the remaining partners -- Britain, China, France, Germany and Russia -- helped it circumvent sanctions, especially to sell its oil.
The White House had earlier said that "the United States and its allies will never allow Iran to develop nuclear weapons," vowing to continue exerting "maximum pressure" on the regime.
"It was a mistake under the Iran nuclear deal to allow Iran to enrich uranium at any level," spokeswoman Stephanie Grisham said in a statement.
Zarif insisted Iran had done nothing wrong.
"We have NOT violated the #JCPOA," he tweeted, referring to the deal.
He said Iran would "reverse" its decision "as soon as E3 abide by their obligations" -- referring to the European parties to the deal: Britain, France and Germany.
Zarif's American counterpart Mike Pompeo accused Iran of using its nuclear program "to extort the international community and threaten regional security."
The International Atomic Energy Agency confirmed Iran had exceeded the limit that the deal imposed on its stockpile of low-enriched uranium (LEU).
A diplomat in Vienna, where the UN's nuclear watchdog is based, told AFP that Iran had exceeded the 300 kilograms (661 pounds) limit by two kilograms.
Russia's deputy foreign minister, Sergei Ryabkov, said Iran's move was a cause for "regret" but also "a natural consequence of recent events" and a result of the "unprecedented pressure" from the US.
"One mustn't dramatise the situation," Ryabkov, whose country is a close ally of Tehran, said in comments reported by Russian news agencies.
Britain's Foreign Minister Jeremy Hunt said on Twitter that London was "deeply worried" and urged Iran to "come back to compliance" with the nuclear deal.
UN chief Antonio Guterres said it was "essential" that Iran sticks to the deal.
Israeli Prime Minister Benjamin Netanyahu urged European countries to impose sanctions on his country's arch-foe Iran.
Trump spoke with French President Emmanuel Macron on Monday about Iran's breach of the nuclear deal limit, the White House said.
The European Union said Friday after a crisis meeting aimed at salvaging the deal that a special payment mechanism set up to help Iran skirt the sanctions, known as INSTEX, was finally "operational" and that the first transactions were being processed.
But "the Europeans' efforts were not enough, therefore Iran will go ahead with its announced measures," Zarif said.
INSTEX, which "is just the beginning" of their commitments, has not yet been fully implemented, he added.
The 2015 deal saw Iran commit to never acquiring an atomic bomb, accept drastic limits on its nuclear program and submit to IAEA inspections in exchange for a partial lifting of crippling international sanctions.
Iran has also threatened to start enriching uranium above the agreed maximum purification level of 3.67 per cent from July 7. That remains far short of the 90 per cent purity required to build a weapon.
The latest tensions coincide with a buildup of US forces in the Gulf and a series of incidents including Iran's shooting down of a US drone it claimed had entered its airspace.