Iran on Saturday rejected a Reuters report that Tehran has moved missiles to Iraq, saying it aimed to hurt Iran's ties with neighbours, the Iranian state news agency IRNA reported.

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"Such false and ridiculous news have no purpose other than affecting Iran's foreign relations, especially with its neighbours," Foreign Ministry spokesman Bahram Qassemi said, according to IRNA.

Iranian balistic missiles: Fateh-110

Iranian, Iraqi and Western sources have told Reuters that Iran has given ballistic missiles to Shi'ite proxies in Iraq and is developing the capacity to build more there.

"This news is solely aimed at creating fears in the countries of the region," Qassemi added.

Any sign that Iran is preparing a more aggressive missile policy in Iraq will exacerbate tensions between Tehran and Washington, already heightened by US President Donald Trump's decision to pull out of a 2015 nuclear deal with world powers.

Iranian balistic missile: Zolfaqar

It would also embarrass France, Germany and the United Kingdom, the three European signatories to the nuclear deal, as they have been trying to salvage the agreement despite new US sanctions against Tehran.

According to three Iranian officials, two Iraqi intelligence sources and two Western intelligence sources, Iran has transferred short-range ballistic missiles to allies in Iraq over the last few months. Five of the officials said it was helping those groups to start making their own.