On Saturday, Iran announced that it successfully tested a new ballistic missile with a range of up to 1,200 miles.
The missile was tested in defiance of USA warnings as the country's President vowed to carry on with its missile program.
It also carried in-flight video from the nose cone.
"We will promote our defensive and military power as much as we deem necessary", Rouhani told a military parade. However, Washington has on several occasions slapped new sanctions against Iran over its missile program.
"We will increase our military power as a deterrent".
Earlier this week, Trump had urged the global community not to let the Iranian regime to continue destabilizing activities as it builds "dangerous missiles".
In addition to carrying out missile tests, Iran has also launched a space satellite and fired missiles at Islamic State group targets in eastern Syria in recent months.
Tehran has backed Yemen's Shiite rebels known as Houthis against a US -supported and Saudi-led coalition of mostly Arab states that seeks to return the internationally elected government to power in Yemen.
However, at the conclusion of negotiations of the nuclear agreement, the United Nations Security Council passed a resolution urging Iran to curtail its ballistic missile program.
Iran's elite Revolutionary Guard on Sunday publicly displayed the country's sophisticated Russian-made S-300 air defense system in central Tehran for the first time. If he decides it is not, it could mean renewed United States sanctions and the collapse of the agreement.
Trump was referencing the 2015 Iran nuclear deal that lifted United Nations economic sanctions on Iran in exchange for its cessation of some of its nuclear activities.
The President's critique bolstered the view of those who believe the U.S. will walk away from the Iranian nuclear deal struck under Barack Obama.
The next major deadline comes in October when Trump will decide whether to certify that Iran is complying with the agreement, known as the Joint Comprehensive Plan of Action.
As part of the nuclear agreement, President Trump has to re-certify the Iran deal to congress every 90 days. "Iran's military power lies in its commitment to never invade another country or land".