Iranians could be playing "a risky game" by getting involved in Iraq, Defence Secretary John Reid has warned.
There have been violent anti-British attacks in Iraq
Mr Reid said there was no conclusive proof implicating Tehran but he believes Iranian elements are linked to insurgents attacking UK troops in Iraq.
Mr Reid spoke after meeting EU defence ministers at RAF Lyneham on Thursday.
Iran denies UK claims it is responsible for explosions that have caused the deaths of all eight British soldiers killed in Iraq this year.
Mr Reid told reporters: "We believe that there are elements of Iranian society - I put it no higher than that - who may well be associated with the attacks on British troops."
"That is not acceptable. It is not something we can tolerate. British troops will do everything necessary to defend themselves. Anyone who is involved in this sort of thing is involved in a risky game," he said.
UK defence sources have said specialist bomb-makers targeting British troops in southern Iraq are being trained by an elite arm of Iran's armed forces.
Speaking on Wednesday, Mr Straw said military action against Iran's alleged nuclear ambitions was "inconceivable".
But he said it was not sensible to speculate about the tactics British commanders could use against those targeting their troops.
Prime Minister Tony Blair has said the evidence linked the British soldier attacks either to Iran or its militant, Lebanese allies Hezbollah, but added that officials could not be sure.