Israel's Defence Minister Avigdor Lieberman on Saturday denounced Iran's testing of a medium-range missile as a "provocation" and said it was proof of Tehran's ambition to become a world power.
Iran on Saturday said it had successfully tested a missile with a range of 2,000 kilometres (1,250 miles) and that can carry multiple warheads, in defiance of US warnings.
"The ballistic missile which Iran fired is a provocation of the United States and its allies, including Israel," Lieberman said in a statement.
"It is also a means to test our reactions as well as new proof of Iran's ambition to become a world power in order to threaten the countries of the Middle East and democratic states around the world."
The test comes at the end of a heated week of diplomacy at the UN General Assembly, where both the United States and Israel denounced Iran and its nuclear deal with six world powers.
US President Donald Trump accused Iran of destabilising the Middle East, calling it a "rogue state whose chief exports are violence, bloodshed and chaos".
The American president also threatened to bin the 2015 nuclear accord, saying Iran is developing missiles that could be used to deliver a nuclear warhead.
Echoing him, Israeli Prime Minister Benjamin Netanyahu said since the deal Iran has been "like a hungry tiger unleashed, not joining the community of nations but devouring nations one after the other".
Netanyahu vowed to fight what he described as "an Iranian curtain" descending on the Middle East, and pledged to prevent Iran from producing any weapons that could hit Israel.
"Those who threaten us with annihilation put themselves in mortal peril. Israel will defend itself with the full force of our arms and the full power of our convictions," Netanyahu said at the UN.
UN inspectors say Iran has fulfilled its commitments to give up its nuclear activities under the agreement, which was reached with the five permanent members of the UN Security Council and Germany.
Iran says all of its missiles are designed to carry conventional warheads only, and has limited their range to a maximum of 2,000 kilometres, although commanders say they have the technology to fly further.
That makes them only medium-range but still sufficient to reach Israel or US bases in the Gulf.