The surprise step, under the US-brokered Abraham Accords, broke with decades of Arab consensus that ruled out formal ties while the Palestinian conflict was unresolved.
The ministry of foreign affairs strongly condemns the action of the US treasury department in repeatedly sanctioning the ministry of intelligence of the Islamic republic.
The Treasury also placed sanctions on three Iranian companies involved in developing and producing drones and linked to the powerful Islamic Revolutionary Guard Corps.
The United States will take further action to hold Iran accountable for actions that threaten the security of a US ally and set a troubling precedent for cyberspace.