In a statement on Thursday, Mr Austin said "frank and candid" discussions had taken place between the two nations, but he "remained concerned about what we're seeing in terms of escalation of violence".
Ahead of the meeting, the Financial Times reported, a US official added: "Focusing on violence in the West Bank... detracts from our ability to focus on... Iran’s dangerous nuclear advances and continuing regional and global aggression."
Mr Coughlin continued: "At the same time, there is evidence that Iran is increasing its more low-level terrorist activities in Europe. The presence of Iranian hit squads in London sent to silence critics of the regime recently forced a prominent Iranian opposition channel to relocate to Washington.
"The British authorities could not provide adequate protection, a worrying indication of the poor state of preparedness of our security services to deal with Iran’s nefarious activities."
He added: "Rather than pandering to the ayatollahs, there now needs to be a major rethink of how we deal with Iran, one that takes full cognisance of the scale of Tehran’s hostile intent."
The most pressing issue facing Britain, and other allies in the West, is Iran's ambition to continue collecting nuclear arms, despite sanctions refusing it to carry out such actions.
Assessments made by Western officials had to be raised after it emerged that nuclear inspectors found uranium particles at the Iranian Fordow plant had 83.7 percent purity, hidden deep within the country's mountains.
The facility, Mr Coughlin noted, was built in the early part of the millennium and was subjected to "desperate" attempts by Iranians to "conceal the existence" of it from the United Nations, knowing the plant represented a breach of the Treaty of the Non-Proliferation of Nuclear Weapons.
The recent report outlining how Iran has begun enriching uranium, which is used in nuclear weapons, was completed by the International Atomic Energy Agency (IAEA) and released on Wednesday.
At present, most uranium used in nuclear weapons currently is enriched to approximate levels of 93.5 percent, leading to fears of how close Iran's enrichment programme is getting to that figure.
In a statement from the US, France, Germany and Britain, the nations described IAEA's findings as "alarming... Iran continues its unprecedented and grave nuclear escalation", Corinne Kitsell and Götz Schmidt-Bremme, the British and German ambassadors to the watchdog said.
The pair added: "This is significantly inconsistent with the level of enrichment declared by Iran and Iran has yet to convince us that this was due to its claimed ‘unintended fluctuations'."
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