Israel's Defence Minister Avigdor Lieberman said the country is monitoring Iranian threats in Syria and it "will contend with any Iranian threat, and it doesn't matter from where it comes."
Israel signaled on Monday that it could attack suspected Iranian military assets in Iraq, as it has done with scores of air strikes in war-torn Syria.
Citing Iranian, Iraqi and Western sources, Reuters reported last week that Iran had transferred short-range ballistic missiles to Shia allies in Iraq in recent months. Tehran and Baghdad formally denied that report.
Israel sees in Iran's regional expansion an attempt to open up new fronts against it. Israel has repeatedly launched attacks in Syria to prevent any entrenchment of Iranian forces helping the Assad regime in the war.
"We are certainly monitoring everything that is happening in Syria and, regarding Iranian threats, we are not limiting ourselves just to Syrian territory. This also needs to be clear," Defence Minister Avigdor Lieberman said.
"Contend with any Iranian threat"
Asked if that included possible action in Iraq, Lieberman said: "I am saying that we will contend with any Iranian threat, and it doesn't matter from where it comes ... Israel's freedom is total. We retain this freedom of action."
There was no immediate response from the government of Iraq, which is technically at war with Israel, nor from US Central Command in Washington DC, which oversees US military operations in Iraq.
Israel's Channel 1 television reported that in recent weeks Washington has asked Israel not to attack in Iraqi territory. It said it had gleaned the information from "Western officials."
US Secretary of State Mike Pompeo said on Saturday he was "deeply concerned" by the reported Iranian missile transfer.
"If true, this would be a gross violation of Iraqi sovereignty and of UNSCR 2231," he tweeted, referring to a UN Security Council resolution endorsing the 2015 international nuclear deal with Iran. The Trump administration abandoned that deal in May, citing, among other factors, Iran's ballistic missile projects.
According to regional sources, Israel began carrying out air strikes in Syria in 2013 against suspected arms transfers and deployments by Iran and its Lebanese ally, the Shia Hezbollah militia.
These operations have largely been ignored by regime ally Russia, and coordinated with other powers conducting their own military operations in Syria.
A Western diplomat briefed on the coordination said last year that, while Israel had a "free hand" in Syria, it was expected not to take any military action in neighbouring Iraq, where the US has been struggling to retain credibility and relevance with the failure of its 2003 invasion to topple Saddam Hussein to bring stability.
Despite their formal state of hostilities, Israel and Iraq have not openly traded blows in decades.
In 1981, Israel's air force destroyed an Iraqi nuclear reactor near Baghdad. During the 1991 Gulf war, Iraq fired dozens of Scud rockets into Israel, which did not retaliate, out of consideration for US efforts to maintain an Arab coalition against Saddam.
Israel made a plan for its commandos to assassinate Saddam in Iraq in 1992, but the plan was abandoned after a fatal training accident.