Iran's President Hassan Rouhani has ordered an expansion of the country's ballistic missile development programme, in a move seen as a response to possible new US sanctions against Iranian officials and businesses.

In a letter to the defence minister on Thursday, Rouhani said Iran will not accept any limitations on its missile programme.

"Apparently, the US government is considering adding new individuals and institutions to the list of its previous oppressive sanctions," Rouhani wrote in the letter.

"It's necessary to continue with greater speed and seriousness the plan for production of various missiles needed by the armed forces within the approved defence policies."

On Wednesday, the Wall Street Journal reported that the US was preparing fresh sanctions against companies and individuals in Iran, Hong Kong and the United Arab Emirates over alleged links to Tehran's ballistic missile programme.

However, on Thursday, the newspaper said that there was no definitive timeline for when the sanctions would be imposed, citing US officials.

Iran condemned the reports, saying it has a right to develop missiles as long as they are not designed to carry nuclear warheads.

A resolution adopted in 2010 prohibits Tehran from conducting launches of ballistic missiles capable of delivering nuclear weapons.

"The US and other western countries consider that programme a national security threat," Al Jazeera's Rosiland Jordan said from Washington DC.

"One thing the US says it will not do is turn a blind eye to Iran's efforts to expand its ballistic missiles regime, and they say that has nothing to do with the ongoing efforts to dismantle Iran's suspected nuclear weapons programme."

Mohammad Marandi, dean of the world studies faculty at the University of Tehran, said Iran's missile programme was intended to enhance the country's defence capabilities.

"These missiles are not designed to carry nuclear warheads and this is basically the sort of narrative the Americans have put out," he told Al Jazeera.

Strained relations

Also on Thursday, Iran denied American accusations that it had conducted "provocative" rocket tests near US Navy vessels patrolling the Strait of Hormuz.

Military spokesman Ramezan Shariff said that Iranian forces did not carry out any drills or fire rockets on Saturday near the key route for oil exports out of the Gulf.

READ MORE: Iran denies firing rockets near US warships in the Gulf

The US Navy told Al Jazeera in an email that Iran's Revolutionary Guard test-fired rockets in close proximity to several US and French vessels, as well as commercial ships.

The US said the rockets were not fired in the direction of vessels from the US or any other state.