A German intelligence report says Iran is trying to expand its arsenal with weapons on mass destruction amid flaring tensions with the U.S.

The May 2019 report refers to the Islamic Republic as a 'risk country' that is 'making efforts to expand its conventional arsenal of weapons with weapons of mass destruction.'

The Bavarian Office for the Protection of the Constitution, the equivalent of MI5, define these as atomic bombs, biological and chemical weapons.

The Iranians said they would restrict their nuclear program in the 2015 Iran Deal, but the Trump administration slammed the agreement because they said it did not prevent weapons development.

Iranian President Hassan Rouhani (pictured at talks in the Black Sea resort of Sochi, Russia) - according to German intelligence Teharn is seeking to build up its nuclear arsenal

The Trump Administration withdrew from the Iran Deal last year claiming it did not prevent Tehran from building weapons

President Donald Trump has famously called it the 'worst deal in history.'

US national security adviser John Bolton said on Wednesday there was 'no reason' for Iran to back out of its nuclear deal other than to seek atomic weapons, a year after the U.S. president unilaterally withdrew America from the accord.

Iran has set a July 7 deadline for Europe to offer better terms to the unravelling nuclear deal, otherwise it will resume enrichment closer to weapons level.

The US ambassador to Germany told Fox News: 'We know the Iranian regime is on the hunt for money to fund their malign activities and so it is imperative that the U.S. and our European allies work together to deny this regime the capital they seek.

'They will use secretive schemes and dark money; we must be vigilant. They are strapped for cash.'

The German Intelligence report states that Iran, along with North Korea and Pakistan, are attempting to obtain contracts from their technologically advanced factories.

It refers to German customs officers intercepting a beam welding machine which can be used for making missile launch vehicles.

The device had been ordered through a Malaysian company but was destined for Iran, the intelligence report said.

F/A-18 Super Hornets sit secured on the flight deck of the Nimitz-class aircraft carrier USS Abraham Lincoln in the Arabian Sea on Sunday

Amphibious assault ship USS Kearsarge and the Arleigh Burke-class guided-missile destroyer USS Bainbridge sail in formation as part of the USS Abraham Lincoln aircraft carrier strike group in the Arabian Sea earlier this month

In recent weeks, tensions have soared as the U.S. beefed up its military presence in the Persian Gulf in response to a still-unexplained threat from Iran.

On Wednesday, Trump's adviser Bolton, claimed the alleged sabotage of four oil tankers off the coast of the United Arab Emirates came from naval mines placed 'almost certainly by Iran.'

Speaking in Abu Dhabi, the Emirati capital, Bolton told journalists that there had been a previously unknown attempt to attack the Saudi oil port of Yanbu as well.

Saudi officials did not immediately respond to a request for comment about Bolton's claim on Yanbu, which is the terminus, or end point, of the kingdom's East-West Pipeline.

That pipeline was attacked in recent days in a coordinated drone assault launched by Yemen's Iranian-backed Houthi rebels.

The U.S. also has accused Iran of being behind a string of incidents, including the alleged sabotage of oil tankers near the UAE coast and a rocket that landed near the U.S. Embassy in Baghdad, while Yemen's Iranian-aligned Houthi rebels have launched a string of drone attacks targeting Saudi Arabia.

Iran, meanwhile, has announced it was backing away from the 2015 nuclear deal, which saw it limits its enrichment of uranium in exchange for the lifting of economic sanctions.

Qatari Air Force Mirage 2000s, right, and U.S. F-35A Lightning IIs fly in formation over Southwest Asia in undisclosed location last week

Trump withdrew the U.S. from the accord as he believes it didn't go far enough in limiting the Iranian nuclear program, nor did it address Iran's ballistic missile program.

Bolton said that without more nuclear power plants, it made no sense for Iran to stockpile more low-enriched uranium as it now plans to do.

But the U.S. also earlier cut off Iran's ability to sell its uranium to Russia in exchange for unprocessed yellow-cake uranium.

'There's no reason for them to do (higher enrichment) unless it is to reduce the breakout time to nuclear weapons,' Bolton said.

Iran long has insisted its nuclear program is only for peaceful purposes. However, Western powers pushed for the nuclear deal to limit Iran's ability to seek atomic weapons.