In a speech broadcast on national television on the anniversary of America's withdrawal from the deal, President Hassan Rouhani said the country would also resume high level enrichment of uranium if world powers did not keep their promises under the Obama-era agreement.
"We felt that the nuclear deal needs a surgery and the painkiller pills of the last year have been ineffective," Rouhani said. "This surgery is for saving the deal, not destroying it."
The 2015 deal saw sanctions on Iran lifted in exchange for limits on its nuclear program.
The Trump administration has previously acknowledged that Iran was living up to the agreement, but alleges it also gave the Islamic republic cover to pursue its ballistic weapons program and deepen its regional influence.
Speaking Wednesday, Rouhani said the remaining signatories to the pact — the U.K., France, Germany, China and Russia are still committed to the deal — had 60 days to implement their promises to protect Iran's oil and banking sectors from U.S. sanctions.
Rouhani also warned of a "strong reaction" if European leaders sought to impose more sanctions on Iran via the U.N. Security Council. He did not elaborate.
In an interview with NBC News in Sept. 2017, Rouhani warned that if Trump backed out of the deal, "no one will trust America again."
Western governments had long feared Iran's atomic program could allow it to build nuclear weapons. Iran has always maintained its program is for peaceful purposes.
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Under terms of the deal, Iran can keep a stockpile of no more than 660 pounds of low-enriched uranium. That's compared to the 22,046 pounds of higher-enriched uranium it once had.
President Donald Trump has made countering Iran’s power a foreign policy priority.
Saudi Arabia and other Gulf monarchies view Shiite Iran as deeply hostile and have warned for years of the country's influence in the region, including in Iraq, Afghanistan and civil wars in Syria and Yemen.
Israel, meanwhile, considers Iran its biggest threat and has launched hundreds of airstrikes to curtail Iranian forces and Tehran-backed Lebanese militia Hezbollah in Syria, and keep them away from its northern border.
"We will not allow Iran to acquire nuclear weapons," Israeli Prime Minister Benjamin Netanyahu said in a speech marking Israel's Memorial Day on Wednesday.
The decision to target the powerful IRGC was aimed at ratcheting up pressure on Iran, and sending a “clear measure to Tehran that its support for terrorism has serious consequences,” according to a statement by the White House on April 8. “We will continue to increase financial pressure and raise the costs on the Iranian regime for its support of terrorist activity until it abandons its malign and outlaw behavior.”
The "main signal" the Iranian government was trying to send Wednesday was that "they don't want to accept the status quo," according to Aniseh Tabrizi, an Middle East expert at the Royal United Services Institute, a London-based think tank.
While seeking to contain Iran, the U.S. moves could end up empowering hardliners within the country, Tabrizi said.
Rouhani, who is seen as a reformer, had staked his political future on the deal and engaging with the West — arguing that signing a nuclear deal would boost the economy.
Now he and other reformers were “more isolated than ever,” and paying the price for trusting the West and the U.S. specifically, Tabrizi said.
Iran’s Foreign Minister Javad Zarif blamed not only the U.S. for the country's decision, but also other signatories of the deal.
"The European Union and rest of the world community have been incapable of resisting the U.S. pressures," he told reporters. "The Islamic Republic sees it as expedient to stop implementing some of its commitments and some of the measures it had voluntarily taken within the nuclear deal for the time being."
Zarif spoke during a visit to Moscow — a sign of the widening gap between the U.S. and regional allies like Israel, Saudi Arabia and the United Arab Emirates versus Iran and its partners such as Syria and Russia.
“Tehran is an old and reliable partner of Moscow in the region,” the Russian foreign ministry said in a statement. “The Russian-Iranian political dialogue is progressively developing.”
Even before Tehran's announcement, there was growing alarm at the recent moves toward Iran.
Late Tuesday, Sen. Tim Kaine, D-Va., said he was “deeply worried” that the Trump administration was heading toward an "unnecessary war."
“One year ago, the president withdrew the United States from the deal that prevented Iran from building nuclear weapons,” he said in a statement. “In the months since, Trump’s White House has taken a series of actions to increase tensions, including misrepresenting the regular deployment of the USS Abraham Lincoln as a warning to Iran.”
F. Brinley Bruton reported from London, Ali Arouzi from Tehran and Paul Goldman from Tel Aviv, Israel.
F. Brinley Bruton
F. Brinley Bruton is senior editor in charge of NBC News Digital’s London bureau.
Ali Arouzi is NBC News' Tehran bureau chief and correspondent.
Paul Goldman, Reuters and Associated Press contributed.