Saudi Arabia has given Iranian diplomats 48 hours to leave the country, amid a row over the Saudi execution of a top Shia Muslim cleric.
Saudi Foreign Minister Adel al-Jubeir announced on Sunday the country had broken off diplomatic ties with Iran.
Iran said this would not distract from Riyadh's "big mistake" in executing the cleric, the IRNA agency reported.
The United States has appealed for calm, saying diplomatic engagement is essential to resolve differences.
Sheikh Nimr al-Nimr and 46 others were executed on Saturday after being convicted of terror-related offences.
Speaking after demonstrators had stormed the Saudi embassy in Tehran, Mr Jubeir said Saudi Arabia was recalling its diplomats from Tehran.
He said Saudi Arabia would not let Iran undermine its security, accusing it of having "distributed weapons and planted terrorist cells in the region".
"Iran's history is full of negative interference and hostility in Arab issues, and it is always accompanied by destruction," he told a news conference.
US state department spokesman John Kirby said: "We will continue to urge leaders across the region to take affirmative steps to calm tensions".
"We believe that diplomatic engagement and direct conversations remain essential," he said.
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