US Defence Secretary James Mattis has called Iran the world's "biggest state sponsor of terrorism", amid rising tensions between the two nations.
His comments come a day after the Trump administration imposed new sanctions against Iran in response to a ballistic missile test.
But Mr Mattis said he did not see any need to boost US troop numbers in the Middle East to deal with Iran.
Iran has been carrying out military exercises in a show of defiance.
Tense but unclear Trump-Iran relations
The Revolutionary Guards, set up to defend Iran's Islamic government, said the drills would "showcase the power of Iran's revolution and to dismiss the sanctions".
Iranian-built missile systems, radars, command and control centres, and cyber warfare systems are being tested during Saturday's exercises, state media reported.
Source bbc news .