"It is a source of concern to us that they are pursuing a program of this nature," presidential spokesman Mike McCurry said.
U.S. intelligence agencies detected the test early Wednesday, tracking the launch and path of the medium-range Shahab-3 missile, officials said. "We actively monitor their military capacity and things like their missile technology," McCurry said. "We certainly detected the launch and certainly are well aware of [its] characteristics."
One official, speaking on condition that he not be identified, said the missile was similar to a weapon first tested by North Korea in 1993. McCurry said North Korea does not conceal the fact that it is selling missiles to get hard currency.
He disputed assertions that the test had changed the balance of power in the region. "One single missile test does not change balance of power," he said. "What you learn about is direction and intent of programs."
There was no immediate information on the location of the launch or landing, both of which occurred inside Iran. The test was first reported by The New York Times and The Washington Times.
"This weapon would allow Iran to strike all of Israel, all of Saudi Arabia, most of Turkey, and a tip of Russia," a senior Clinton administration official told The New York Times.
Another official, also unidentified, told the Washington newspaper: "It is a significant development, because it puts all U.S. forces in the region at risk."
CBS News Correspondent Jesse Schulman reports that Israeli officials are condemning the test and saying that it has "upset the balance of power in the region."
Intelligence experts investigating the launch believe Iran bought the missile from North Korea, which has said it would sell to any nation with hard currency.
Iran also is building another version of the missile, which is expected to have a range of up to 1,240 miles long enough to reach central Europe, The Washington Times reported.
Iran has bought technology from Russia and China, and wants to be seen as a political and military force in the Middle East, officials said. Israel is widely believed to be the only nuclear power in the region, with missiles capable of striking any Middle East nation.
Iran is working on developing a nuclear warhead but is believed to be years away from building and testing a weapon, The New York Times said.
Israeli Defense Minister Yitzhak Mordechai said he did not believe an Iranian missile could reach Israel, but that the reported missile tests were "a very serious matter."