On Wednesday, Bahrain's Parliament voted in favor of confiscating the Iranian Embassy building in Manama and converting it into a governmental property.
The vote, however, will be forwarded to Bahrain's Cabinet for a final decision.
“If Bahrain implements this plan, Iran will undoubtedly retaliate in kind,” said Sobhani-Nia, the deputy head of the Parliament's National Security and Foreign Policy Commission.
“If Bahrain carries out this plan due of pressures by the US and Western countries, it would commit an irreparable blunder,” he added.
Sobhani-Nia said Iran's diplomatic apparatus should defend the country's interests by showing “an appropriate reaction” to such moves.
Since mid-February, thousands of anti-government protesters in Bahrain have poured into streets, calling for an end to Al Khalifa dynasty, which has ruled the country for over 40 years.
On March 13, Saudi-led forces were dispatched to the Persian Gulf kingdom at Manama's request to quell the popular protests.
According to local sources, scores of people have been killed and hundreds arrested so far during the government clampdown on peaceful demonstrations in Bahrain.