A senior Pentagon official said on Wednesday there were indications that Iran could potentially carry out aggressive actions in the future, amid simmering tensions between Tehran and Washington. The warning comes on the same day of new reports of Iran building up a “hidden arsenal of short-range ballistic missiles in Iraq.”

"We also continue to see indications, and for obvious reasons I won't go into the details, that potential Iranian aggression could occur," John Rood, the Pentagon’s No. 3 official, told reporters.

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Rood did not provide details about what information he was basing that on or any timeline.

"We've sent very clear and blunt signals to the Iranian government about the potential consequences of aggression," Rood said.

Two U.S. officials, speaking on the condition of anonymity, told Reuters there was intelligence over the past month indicating that Iran was moving forces and weapons in the region.

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Open gallery view Distance from Iranian missile sites Credit:

It was not clear what specifically Iran was looking to do with the movements, they added. One of the officials said that part of the concern was Iranian activity inside Iraq, which is experiencing anti-government protests.

The New York Times also reported Wednesday that “Iran has used the continuing chaos in Iraq to build up a hidden arsenal of short-range ballistic missiles in Iraq, part of a widening effort to try to intimidate the Middle East and assert its power.” The Times quoted “American intelligence and military officials” who added that “the missiles pose a threat to American allies and partners in the region, including Israel and Saudi Arabia, and could endanger American troops.”

The intelligence officials would not discuss the exact model of ballistic missile Iran "has sneaked into Iraq" according to the Times, but the report made clear that the "short-range missiles have a range of just over 600 miles, meaning that one fired from the outskirts of Baghdad could strike Jerusalem."

Last year, Reuters reported that Iran had given ballistic missiles to Shi’ite proxies in Iraq and was developing the capacity to build more there to deter attacks on its interests in the Middle East and to give it the means to hit regional foes.

The United States has deployed thousands of additional military forces in the Middle East, including bombers and air defense personnel, to act as a deterrent against what Washington says is provocative Iranian behavior.

Tensions in the Gulf have risen since attacks on oil tankers during the summer, including off the coast of the United Arab Emirates, and a major assault on energy facilities in Saudi Arabia. The United States has blamed Iran, which has denied being behind the attacks on global energy infrastructure.

The U.S. officials said there were ongoing discussions about adding more U.S. troops in the region but that no decision had been made and the situation was fluid. They said the military regularly talked about forces around the world, including in the Middle East.

Iran has been facing weeks of sometimes violent protests against gasoline price hikes.

The unrest, which began on Nov. 15 after the government abruptly raised fuel prices by as much as 300 percent, spread to more than 100 cities and towns and turned political as young and working-class protesters demanded clerical leaders step down.

Tehran's clerical rulers have blamed "thugs" linked to its opponents in exile and the country’s main foreign foes - the United States, Israel and Saudi Arabia - for the unrest.