David Cameron has accused Iran of having a nuclear weapons programme and threatened fresh sanctions if it does not change course.
There was "grave concern" about Iran and it risked becoming a "pariah state" through its actions, he added.
The rest of the world did not want an arms race, said the UK prime minister, who is touring the Middle East.
The US and other Western powers say Iran is trying to develop a nuclear weapon, a charge Iran denies.
The United Nations has imposed sanctions after the country refused to halt its uranium enrichment efforts.
'Nowhere to go'
President Mahmoud Ahmadinejad's government insists it has no plans to build a nuclear bomb, and that it wants only to develop atomic power stations and other "peaceful" uses of the technology.
A round of talks between international powers and Iran ended without progress in Istanbul last month.
EU foreign policy chief Baroness Ashton, who led the international team, said Iran had come to the talks with pre-conditions.
While no date was set for new talks, she said the "door remained open".
Iran's chief negotiator said any deal should be based on Tehran's right to uranium enrichment.
Speaking in Qatar, Mr Cameron told the BBC: "Iran remains a grave concern because of its intent to acquire nuclear weapons.
"They are already suffering from international sanctions their economy is weak and vulnerable and the regime only survives by cracking down on its political opposition.
"On its current path Iran is set to become an international pariah state with no friends, no money, nowhere to go.
"Britain and its international partners remain ready to negotiate and we are not going to be taken for a ride. We will continue to find ways to increase the pressure.
"We will work vigorously to ensure international sanctions are implemented and I have asked my officials to consider what more can be done in this important area."
During a question-and-answer session with Qatari students, Mr Cameron said: "Iran is trying to get a nuclear weapon. It's in the interests of everyone here and everyone in the world that we don't get a nuclear arms race."
'Turn the tap off'
The prime minister's Middle East visit comes amid widespread unrest in Libya and Bahrain.
It also follows regime changes in Egypt and Tunisia brought about by popular revolts.
Mr Cameron said countries in the region should lose European Union funding if they failed to make political change.
An aide to Mr Cameron said the European Union's Neighbourhood Policy funding, which gives £1.5bn a year to Middle East countries to promote democracy, had "completely failed".
It was time to "turn off the tap" of aid, towards which the UK gives £200m annually, he added.
Egypt, which Mr Cameron visited on Monday, 10 days after President Hosni Mubarak's regime was ousted, receives one of the biggest shares of Neighbourhood Policy funding.
Libya, where demonstrations against the rule of Muammar Gaddafi have been repressed with violence resulting in at least 300 deaths, also benefits, as do Tunisia, Morocco, Algeria, Israel, Jordan, Lebanon and Syria.
The official said: "On all the big things you would expect the EU to stand up for, there has been very little progress. At the same time we continue to pour money into Egypt and other countries of the region...
"We can't be in this position where we are using our taxpayers' money, other member states' taxpayers' money... when we are not getting anything in return."
Mr Cameron set out his determination to reduce the payments to fellow heads of state at a recent EU summit and in talks at Downing Street last week with Commission President Jose Manuel Barroso.
Officials from EU member states are travelling to Brussels on Wednesday for further discussions, with France believed to be among the most significant objectors to the prime minister's call.
In addition to a diplomatic mission, Mr Cameron is using his Middle East trip to promote British business.
On Wednesday, Centrica, the parent company of British Gas, announced a "ground-breaking" deal worth about £2bn to supply 2.4 million tonnes of liquefied natural gas from Qatar.
This is expected to meet about 10% of the UK's residential gas demand, supplying 2.5 million households.
And the Qatari prime minister suggested his country would be interested in buying Britain's partially state-owned banks, after talks with Mr Cameron.
Asked if he wanted to buy a stake in RBS or Lloyds, Sheikh Hamad bin Jassim said: " About any investment in the state or partially state-owned banks, we are very open for any investment in the UK.
"In fact we discussed some ideas with the prime minister. Our team has been engaged and we will continue to discuss investment in the UK."