Iran has launched over a dozen ballistic missiles at two air bases housing US troops in Iraq.
The attack was in retaliation to the assassination of Iran's most powerful military commander, Qasem Soleimani, ordered by Donald Trump last week.
The US president said an assessment of casualties and damages was under way, but insisted on Twitter that "all is well".
He offered no immediate indication of whether he would retaliate, and stayed out of sight as news of the surface-to-surface missile strikes emerged.
"All is well! Missiles launched from Iran at two military bases located in Iraq," Mr Trump wrote.
"Assessment of casualties & damages taking place now. So far, so good! We have the most powerful and well equipped military anywhere in the world, by far! I will be making a statement tomorrow morning."
Foreign Secretary Dominic Raab said of the missile strike: "We condemn this attack on Iraqi military bases hosting coalition - including British - forces.
"We are concerned by reports of casualties and use of ballistic missiles.
"We urge Iran not to repeat these reckless and dangerous attacks, and instead to pursue urgent de-escalation.
"A war in the Middle East would only benefit Daesh (so-called Islamic State) and other terrorist groups."
Iran had vowed "serious revenge" after the assassination of Soleimani, and former defence minister Tobias Ellwood told talkRADIO that the UK had put measures in place to protect holidaymakers and military personnel.
The missile strikes came as tensions have been rising steadily across the Middle East after Mr Trump's decision to unilaterally withdraw America from Tehran's nuclear deal with world powers.