UK Foreign Secretary William Hague has warned in a BBC interview about Iran's "increasing willingness to contemplate" terrorism around the world.
He cited an attempt to assassinate the Saudi ambassador to the US, plus alleged involvement in recent attacks in New Delhi, Georgia and Bangkok.
Mr Hague said it showed "the danger Iran is currently presenting to the peace of the world".
Iran denies any involvement in the recent attacks.
It also says its nuclear programme is for purely peaceful purposes.
The West has expressed fears that Iran is secretly trying to develop a nuclear bomb.
Mr Hague said that if Iran did develop nuclear weapons it would either lead to an attack on it and war, or there would be an arms race in the region and a Cold War with long-term sanctions on the country.
He told BBC One's The Andrew Marr Show that it would be more dangerous than the Cold War between the West and the Soviet Union because there would not be safeguards to avoid "accidents or misunderstandings" triggering nuclear conflict.
Mr Hague's interview came amid heightened tensions in the Middle East, with Israel accusing Iran of masterminding attacks on its embassies in New Delhi in India, Bangkok in Thailand and in Georgia. Iran denies the allegations.
Iran, in turn, blames Israel and the US for the assassination of several Iranian nuclear scientists in recent years, allegations both countries deny.
Speaking earlier this month, US President Barack Obama emphasised that Israel and the US were working in "unison" to counter Iran.
However, some commentators have suggested that behind the scenes Washington is deeply alarmed by reports that Israel may strike Iran as early as April.
US Defence Secretary Leon Panetta reportedly said there was a strong likelihood of such an offensive.
Mr Hague told Saturday's Daily Telegraph that Britain had urged Israel not to strike: "All options must remain on the table" but a military attack would have "enormous downsides."
The foreign secretary told the BBC that the UK had not been shown any plans by Israel for an attack on Iran and had not been asked to be involved in any such attack.
He said that the UK was 100% focused on using diplomacy and economically targeted sanctions "bringing Iran back to the table".
Fresh reports that Iran plans to expand its nuclear programme did not necessarily mean that the strategy was failing, he said.
There had been recent signs of a willingness to negotiate and he said that Iran's desire to make "bold statements" might be because they were "not confident about the future".
Mr Hague said there was "no specific information" about a threat to the London Olympics but "clearly Iran has been involved increasingly in illegal and potentially terrorist activity in other parts of the world".
"We saw the Iranian plot recently to assassinate the Saudi ambassador to Washington on US soil. It's alleged that they have been involved in what happened in the last week in New Delhi, Georgia and Bangkok.
"I think Iran has increased in its willingness to contemplate utterly illegal activities in other parts of the world - this is part of the dangers that Iran is currently presenting to the peace of the world."
Shadow foreign secretary Douglas Alexander said in response to an interview with Mr Hague in the Daily Telegraph: "Instead of raising the rhetoric, the government should be focused on redoubling their efforts to increase the diplomatic pressure on Iran and find a peaceful solution to the issue."
Talks between Iran and six world powers - the US, UK, France, Germany, Russia and China - on Tehran's nuclear programme collapsed a year ago.
In recent months, Western countries have stepped up pressure on Iran over the nuclear issue, with the EU and US both introducing wide-ranging sanctions on the country.
On Wednesday, Iran staged an elaborate ceremony to unveil new developments in its nuclear programme.
It said it had used domestically made nuclear fuel in a reactor for the first time.
On Friday, the US and European Union expressed optimism at the possibility of a resumption of talks with Iran.