Britain, France, and Germany said they would cut aviation agreements with the Islamic Republic and sanction its national carrier Iran Air, claiming Tehran had repeatedly defied warnings about the weapons transfers.
"This act is an escalation by both Iran and Russia and is a direct threat to European security," the so-called E3 powers said in a joint statement.
On a visit to London, US Secretary of State Antony Blinken warned that the missiles could be used against Ukraine "within weeks".
Dozens of Russian military personnel have trained in Iran using the Fath-360 missile, which has a range of 75 miles (120 kilometers), he added.
"Iran's new president and foreign minister have repeatedly said that they want to restore engagement with Europe," he said.
"They want to receive sanctions relief. Destabilizing actions like these will achieve exactly the opposite."
The British government announced soon afterward that it had already begun "the termination of all direct air services between the UK and Iran".
Washington accused Iran Air of "operating or having operated in the transportation sector of the Russian Federation economy", sanctioning it and 10 individuals and companies involved in the supply.
The move was dismissed In Iran, where foreign ministry spokesman Nasser Kanani said the Western claims were false and a distraction from US backing for Israel in its war against Hamas militants.
"Spreading false and misleading news about the transfer of Iranian weapons to some countries is just an ugly propaganda and lie with the aim of concealing the dimensions of the massive illegal arms support of the United States and some Western countries for the genocide in the Gaza Strip," he added.
Joint Ukraine visit
On Ukraine, the State Department said that Blinken would travel to Kyiv on Wednesday in a solidarity trip with UK Foreign Secretary David Lammy, as Ukrainian forces face Russian advances in the east.
Moscow has stepped up its aerial attacks in recent weeks but is also trying to fight off a major Ukrainian cross-border offensive into its western Kursk region, which has reshaped the course of the two-and-a-half-year war.
Lammy said the joint trip demonstrated the two countries' commitment to Ukraine and comes before UK Prime Minister Keir Starmer visits the White House on Friday.
Since Russia's full-scale invasion of Ukraine, Britain has been at the forefront of pushing for more assistance to Kyiv, including loosening restrictions on the use of Western weapons on Russian territory.
Asked about reports that Britain is waiting for a US green light to let Ukraine use long-range Storm Shadow missiles against Russia, Lammy said he would not discuss "operational issues" as "the only person who could benefit" was Russian President Vladimir Putin.
Last week, the UK said that it would send Ukraine 650 new specialist missile systems after President Volodymyr Zelensky complained of slow deliveries from the West.
'Special relationship'
The US-UK "special relationship" has persevered across partisan lines since Starmer's Labour ended the Conservative's 14 years in power in July.
But for Starmer, a full alignment with President Joe Biden's Democratic Party agenda could carry risks just two months before US elections in which Biden's political heir Kamala Harris is running neck and neck in polls with Republican Donald Trump.
While backing Ukraine, Starmer, a former human rights lawyer, has taken a harder line than the Conservatives on Israel, which relies on the United States as its foremost backer in the Gaza war.
His Labour government last week announced restrictions on some weapons to Israel, voicing concern that they could be used to violate international humanitarian law.
The Labour government has also dropped its Conservative predecessor's plans to challenge the right of the International Criminal Court to seek the arrest of Israeli Prime Minister Benjamin Netanyahu.
The United States, while backing The Hague-based court when it comes to Russia, has denounced the bid to target Netanyahu, arguing that Israel has its ways to ensure accountability.
Asked if Britain would oppose a formal move to seek Netanyahu's arrest, and with Blinken by his side, Lammy said that "we believe in international law".
"We believe in the statute of Rome," he added, referring to the treaty that founded the International Criminal Court.
"But these must be decisions for the international courts to determine."
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