Donald Trump yesterday said he will impose additional sanctions on Iran in an effort to prevent Tehran from obtaining nuclear weapons, adding that military action was still a possibility.
Trump made his comments after recently calling off military action against Iran to retaliate for the downing of a US military drone.
"We are putting additional sanctions on Iran," Trump said. "In some cases we are going slowly, but in other cases we are moving rapidly."
But Trump also indicated he was open to reversing the escalation, adding he was willing to quickly reach a deal with Iran that he said would bolster the country's flagging economy. "We will call it 'Let's make Iran great again'."
Trump is spending the weekend at the presidential retreat of Camp David, deliberating on Iran.
Iran said yesterday it would respond firmly to any US threat, the semi-official Tasnim news agency reported, amid escalating tension between Tehran and Washington over the shooting down of an unmanned US drone by the Islamic Republic.
Last Thursday, an Iranian missile destroyed a US Global Hawk spy drone. Tehran repeated yesterday that the drone was shot down over its territory. Washington said the incident occurred in international airspace.
Last Friday, Trump said he aborted a military strike to retaliate because it could have killed 150 people, and signalled he was open to talks with Tehran. But Iran remained belligerent.
"Regardless of any decision the US officials make ... we will not allow any of Iran's borders to be violated. Iran will firmly confront any aggression or threat by America," Iran said.
Worries about a confrontation between Iran and the US have mounted despite Trump saying that he has no appetite for war with Iran. Tehran has also said it is not seeking a war - but warned of a "crushing" response if attacked.
Tensions in the region began to worsen last year when Trump broke with a 2015 nuclear deal between Iran and six powers and reimposed sanctions on the country. The sanctions had been lifted under the pact in return for Tehran curbing its nuclear programme.
Despite the US leaving the deal, Iran kept to its terms - but threatened to breach the deal if the European signatories to the deal failed to shield Tehran from US sanctions. The European and Chinese governments broke with the deal by acquiescing to US demands to economically choke Iran.
"The Europeans will not be given more time beyond July 8 to save the deal," Foreign Ministry spokesman Abbas Mousavi said, referring to Iran's deadline of 60 days that Tehran announced in May.
Over the past weeks, Saudi Arabia have also blamed Iran for attacks on two oil tankers last week in the Gulf of Oman and on four tankers off the United Arab Emirates on May 12.
Iran has denied any involvement in those incidents, but world powers are calling for calm and sending in envoys for talks to try to lower the temperature of a dispute that is already helping push up the price of oil.
Also yesterday, Iran's Foreign Ministry summoned a diplomatic representative of the United Arab Emirates because the UAE allowed the drone that was shot down to be launched from a US military base on its territory.
Separately, Iran executed a former employee of the Ministry of Defence on charges of spying for the CIA.