Repeating that 'never can Iran have a nuclear weapon,' Trump said it was now up to Tehran to negotiate.
Washington: The United States imposed sanctions Monday on Iran's supreme leader Ayatollah Ali Khamenei and a string of military chiefs, tightening pressure on the country that President Donald Trump threatened with "obliteration" if it seeks war.
Trump signed the punitive financial measures against in the Oval Office, calling this a "strong and proportionate response to Iran's increasingly provocative actions."
Repeating that "never can Iran have a nuclear weapon," Trump said it was now up to Tehran to negotiate.
"We do not ask for conflict," he said, adding that depending on Iran's response the sanctions could end tomorrow -- or it "can also be years from now."
Expanding on the new measures, the Treasury said the United States will blacklist Iran's Foreign Minister Mohammad Javad Zarif and block "billions" more in Iranian assets, with eight top commanders from Iran's Revolutionary Guards already added to the list.
Tensions are running high after Iran shot down a US spy drone last week and Trump considered, then cancelled a retaliatory strike.
Iran, crippled by existing US sanctions that include the blocking of most of its crucial oil exports, sought to play down the US move.
"Are there really any sanctions left that the United States has not imposed on our country recently or in the past 40 years?" Iran's foreign ministry spokesman Abbas Mousavi said shortly before Trump signed his order.
"We... do not consider them to have any impact," he said.
Amid a flurry of diplomatic activity, the United States, Britain, Saudi Arabia and the United Arab Emirates urged "diplomatic solutions" in the standoff, which is playing out in a region crucial to the global economy's oil supplies.
French President Emmanuel Macron said he would use a meeting with Trump at the G20 summit in Japan to urge "a constructive solution with the aim of ensuring collective regional security."
The Kremlin, which has longstanding links to Iran's government, earlier called Monday's sanctions "illegal."
US policy clear: Trump
At home, Trump has taken criticism for sending mixed messages to Iran. However, the US president insists he has a clear strategy that breaks firmly with past US policy in the tinderbox Middle East.
In a pair of tweets Monday, Trump said US aims regarding Iran boil down to "No Nuclear Weapons and No Further Sponsoring of Terror."
On Sunday, Trump told an NBC television interview that if it came to war, Iran would experience "obliteration like you've never seen before."
Iran insists that it does not have a nuclear weapons program.
It signed onto an international pact in 2015 meant to ensure that its nuclear industry sticks to civilian uses. Trump, however, pulled the United States out of the deal in 2017, seeking its collapse.
But while some in Washington see the White House's ultimate goal as regime change in Tehran, Trump said he wants to avoid war and that he's open to negotiations with Iran's leaders.
He also insists that Washington's hands are freer than in the past because its own energy production frees it of dependence on Middle Eastern oil.
This means the United States should no longer be seen as the guarantor of open sea lanes in the Gulf region, which saw two mysterious attacks in mid-June on non-US tankers that Washington claims were carried out by Tehran.
"All of these countries should be protecting their own ships," Trump tweeted Monday. "We don't even need to be there."
So far, Trump's carrot-and-stick message does not seem to be getting through to Tehran.
"America's claim of readiness for unconditional negotiation is not acceptable with the continuation of threats and sanctions," Hesamodin Ashna, an advisor to Iran's President Hassan Rouhani, said Monday on Twitter.
The dispute is bound up in a complex web of regional rivalries, with US allies Saudi Arabia and Israel long pushing Washington to act aggressively against Iran.
Israel's Prime Minister Benjamin Netanyahu warned his country, which is widely believed to have an undeclared nuclear arsenal, would do "everything" to stop Iran getting such a weapon.
In New York, the UN Security Council was to meet later Monday at the request of the United States to discuss the tensions.
US Secretary of State Mike Pompeo travelled Monday to meet with Saudi leaders to build what he called a "global coalition" against the Islamic republic.
Pompeo met Saudi King Salman and Crown Prince Mohammed bin Salman in the Red Sea city of Jeddah and was later due to hold talks in the United Arab Emirates.
The sultanate of Oman, meanwhile, said reports that it had served as a back channel for the United States to Iran in the aftermath of last week's drone shooting were "not true."
The foreign ministry called on Iran and the United States via Twitter "to show self-control and to resolve the pending issues through dialogue."
Although Trump backed away from a bombing strike in retaliation for last week's drone downing, US media reports said a US cyber attack took place against Iranian missile control systems and a spy network.
On Monday Iranian Telecommunications Minister Mohammad Javad Azari Jahromi said no cyber attack against his country had ever succeeded.