Argentina accused Britain of sending nuclear weapons to the disputed Falkland islands, while UN leader Ban Ki-moon appealed to both sides to avoid an "escalation" of their sovereignty battle.
With both countries about to commemorate the 30th anniversary of the Falklands War, Argentina's Foreign Minister Hector Timerman on Friday called the islands "the last refuge of a declining empire."
Britain's UN ambassador said his country would "robustly" defend the Falklands and while Britain wanted talks with Argentina, he insisted there could be no sovereignty negotiations unless the population wanted it.
Timerman said Britain had sent a nuclear submarine to the South Atlantic and was "militarizing the region" in breach of a 1967 Latin American treaty which bans the presence, pursuit or use of nuclear weapons.
Argentina invaded the islands, which it calls the Malvinas, in 1982 and Britain sent a naval force to reclaim the territory. Argentina has since regularly taken its claim to the islands to the United Nations.
Timerman made a complaint to the UN secretary general and UN Security Council about the "militarization" but it was unclear whether it had demanded any followup action.
After talks with Timerman, Ban "expressed concern about the increasingly strong exchanges between the governments of Argentina and the United Kingdom," UN spokesman Martin Nesirky said.
"He expressed the hope that the governments of Argentina and the United Kingdom will avoid an escalation of this dispute and resolve differences peacefully and through dialogue."
Ban said he was ready to use the United Nations' "good offices to resolve this dispute" if both sides requested, his spokesman added.
Britain's UN envoy Mark Lyall Grant would not comment on whether a nuclear submarine was near the Falklands. But he said the claims of militarization were "rubbish" and "manifestly absurd."
"It is only because Argentina illegally invaded the Falkland Islands in 1982 that we had to increase our defense posture. Nothing has changed in that defense posture in recent months or recent years," Lyall Grant insisted.
"We are not looking to increase the rhetoric. We have not started a war of words," said the ambassador.
"But clearly if there is an attempt to take advantage of the 30th anniversary of the Falklands War by Argentina then we will obviously defend our position and defend it robustly."
Argentina has denounced the deployment of a British destroyer, HMS Dauntless, to the region and the dispatch of Prince William, second in line to the throne, to serve as a rescue helicopter pilot. Britain says both are routine moves.
The Argentine minister called for Britain to discuss sovereignty at negotiations, and attacked Britain's use of military power to control the South Atlantic islands from 14,000 kilometers (8,700 miles) away.
"It is perhaps the last refuge of the declining empire," Timerman said. "It is the last ocean that is controlled from the UK. Britannia rules only applies in the South Atlantic."
Britain has reaffirmed its stance in recent days that there can be no negotiations over the future of the islands unless the 3,000 Falklands inhabitants want it.
Britain has complained about Argentina withdrawing from joint accords on the Falklands. Argentina in December persuaded the Mercosur Latin American trade bloc to stop Falklands-registered ships from entering member ports.
It has also stopped charter flights heading for the Falklands from using Argentine airspace.
Diplomats say much of the tensions can be attributed to the anniversary of the conflict sparked by Argentina's invasion of the islands on April 2, 1982.
Britain sent a task force to retake the territory it has held since at least 1833. The 74-day war cost the lives of 649 Argentine and 255 British troops and three islanders.
Since the war, the UN General Assembly has passed resolutions calling on Britain and Argentina to negotiate a settlement. Argentina also presses its claim each year at the UN's Decolonization Committee.