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Hours after Trump and his national security adviser put Iran "on notice" over missile tests and support for Yemeni rebels, sources familiar with White House deliberations said new sanctions are in the works.

The sanctions are likely to be levied on individuals or entities linked to Iran's missile programme and will be taken under existing presidential powers.

The measures are likely to replicate actions taken by Barack Obama's administration, which targeted firms and the Revolutionary Guard's missile command after previous tests.

Any move toward broader economic sanctions could risk Iran bolting from a high stakes nuclear deal, which saw Tehran freeze its nuclear programme in return for sanctions relief.

Trump has repeatedly trashed the agreement, but senior administration officials have indicated he will respect it, at least for now.

But Trump sounded a bellicose tone on Thursday, refusing to rule out military action against Iran, saying "nothing is off the table."

Iran has rejected Trump's warnings as unfounded and "provocative".

The US recently raised alarm at the United Nations over Tehran's Sunday test-firing of a medium range missile.

The White House believes that is contravention of a UN Security Council resolution proscribing missiles that could carry a nuclear device.

Referring to the test, a senior administration official said "ballistic missiles designed to be capable of delivering a payload of at least 500 kilogrammes to a range of 300 kilometres are inherently capable of delivering nuclear weapons."

The latest sanctions are designed to show Iran a clean break from the Obama administration, which sought to limit friction.

As Iran has sought to wield its influence from Lebanon to Afghanistan, it has frequently butted up against US interests.

In Iraq, Syria and Yemen Iranian-backed militias have targeted US allies.

While the latest sanctions will not alter that dynamic, the White House is keen to put down a marker.

Aside from a desire for Trump to be seen as backing up his words with action, US officials are also concerned about future Iranian weapons tests.

Tehran is eyeing the development of a space launch vehicle, which, according to a senior administration official, "would be capable of an intercontinental ballistic missile range if it was configured in such a way."