The White House on Wednesday warned of "further action" against Iran as it denounced what it called an "unprecedented" cyber attack against US ally Albania.
"The United States strongly condemns Iran's cyber attack against our Nato ally, Albania," National Security Council spokeswoman Adrienne Watson said in a statement, adding that "Iran should be held accountable".
"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."
Albania's Prime Minister Edi Rama accused Iran of directing the cyber attack against Albanian institutions on July 15 in a bid to "paralyse public services and hack data and electronic communications from the government systems". He is now cutting all diplomatic ties with the nation.
"This extreme response ... is fully proportionate to the gravity and risk of the cyber attack that threatened to paralyse public services, erase digital systems and hack into state records, steal government intranet electronic communication and stir chaos and insecurity in the country," Mr Rama said in a statement.
The incident comes as the US and EU powers are struggling to salvage an agreement that would impose strict controls on the controversial Iranian nuclear sector in exchange for lifting some sanctions.
Albanian officials said the attacks targeted Albania's governmental mainframe and started as a ransomware raid, in which the hackers tried to hit critical systems, aiming to render them functionless, it said.
Authorities also pointed to similarities between international cyber attacks, including ones targeting multiple European countries.
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News agencies contributed to this report