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Trump threatens more sanctions as Iran says it will respond to any U.S. threat

U.S. President Donald Trump said on Saturday he would impose fresh sanctions on Iran but that he wanted to make a deal to bolster its flagging economy, an apparent move to defuse tensions following the shooting down of an unmanned U.S. drone this week by the Islamic Republic.

U.S. president at Camp David retreat for discussions on Iran

U.S. President Donald Trump speaks to reporters on the South Lawn of the White House on Saturday before boarding Marine One for the trip to Camp David in Maryland, where Trump says deliberations on Iran will take place. (Susan Walsh/Associated Press)

U.S. President Donald Trump said on Saturday he would impose fresh sanctions on Iran but that he wanted to make a deal to bolster its flagging economy, an apparent move to defuse tensions following the shooting down of an unmanned U.S. drone this week by the Islamic Republic.

On Thursday, an Iranian missile destroyed a U.S. Global Hawk surveillance drone. Tehran repeated on Saturday that the drone was shot down over its territory. Washington said the incident happened in international airspace.

Tehran repeated on Saturday that the drone was shot down over its territory and said it would respond firmly to any U.S. threat.

Trump said on Friday he had called off a military strike to retaliate over the downing of the drone because it could have killed 150 people.

Military action 'always on the table'

Speaking in Washington on Saturday before heading to the U.S. presidential retreat at Camp David, where he said he would deliberate on Iran, Trump indicated the U.S. government was taking a diplomatic path to put pressure on Tehran.

"We are putting additional sanctions on Iran," Trump said. "In some cases we are going slowly, but in other cases we are moving rapidly."

Military action was "always on the table," the president said, but he added that he was open to quickly reaching 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 said.

He later wrote on Twitter from Camp David: "We are putting major additional Sanctions on Iran on Monday. I look forward to the day that Sanctions come off Iran, and they become a productive and prosperous nation again."

Iran promises 'crushing' response if attacked

The Trump administration has sought to use promises of economic revival to solve other thorny foreign policy challenges, including the Israel-Palestinian peace process, with the White House outlining on Saturday a plan to create a global investment fund to lift the Palestinian and neighbouring Arab state economies.

But worries about a confrontation between Iran and the United States have mounted despite Trump saying he has no appetite to go to war with Iran. Tehran also has said it is not seeking a war but has warned of a "crushing" response if attacked.

A screen grab made available by Iran state television English service press TV (PTV) reportedly shows footage released of Iran's surface-to-air missile system Khordad-3, which shot down the U.S. surveillance drone, an unmanned aircraft with a wingspan larger than a Boeing 737 jetliner and costing over $100 million US. (EPA-EFE)

"Regardless of any decision they [U.S. officials] make ... we will not allow any of Iran's borders to be violated. Iran will firmly confront any aggression or threat by America," Foreign Ministry spokesperson Abbas Mousavi told the semi-official Tasnim news agency on Saturday.

A senior commander of the elite Revolutionary Guards struck a similarly defiant note, in comments quoted by the Islamic Republic News Agency (IRNA).

"If the violation is repeated, then our response will be repeated," said Brig.-Gen. Amirali Hajizadeh, head of the Guards' aerospace division.

"It's possible that this infringement of the Americans was carried out by a general or some operators."

Iran's foreign minister, Mohammad Javad Zarif, published a map on Twitter with detailed co-ordinates which he said showed the drone was flying over Iran's territorial waters.

Tensions worsened when Trump pulled out of nuclear deal

A Pentagon spokesperson, Cmdr. Rebecca Rebarich, said on Saturday: "We stand by where we said the aircraft was operating in international airspace."

Iran's Foreign Ministry summoned a diplomatic representative of the United Arab Emirates on Saturday because the UAE allowed the drone that was shot down to be launched from a U.S. military base on its territory, the Fars news agency reported.

Military sources told Reuters that U.S. forces were getting ready to evacuate a military base in neighboring Iraq over "potential security threats," without saying what those threats might be. That was denied by Iraqi and U.S. military spokesmen on Saturday.

Tensions in the region began to worsen significantly when Trump pulled out of a 2015 nuclear deal between Iran and six other powers and reimposed sanctions on the country. The sanctions had been lifted under the pact in return for Tehran curbing its nuclear program.

World powers call for calm

The United States and Iran's main regional rival 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.

Both incidents happened near the strategic Strait of Hormuz, a major conduit for global oil supplies.

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.

German Chancellor Angela Merkel called on Saturday for a political resolution of the crisis, adding: "That is what we are working on."

A woman walks past a mural painting on Palestine Square in the Iranian capital of Tehran on Saturday. (Atta Kenare/AFP/Getty Images)

Britain's Foreign Office said Middle East minister Andrew Murrison would visit Tehran on Sunday to raise concerns about "Iran's regional conduct and its threat to cease complying with the nuclear deal."

Iran has threatened to breach the deal if the European signatories to the agreement fail to salvage it by shielding Tehran from U.S. sanctions.

U.S. cyberattack

On Thursday, the Pentagon launched a long-planned cyberattack in retaliation for the oil tanker incidents, Yahoo News reported, citing former intelligence officials. The cyber strike disabled Iranian rocket launch systems, the Washington Post said on Saturday.

A U.S. Department of Defence spokeswoman said it would not comment on cyberspace operations, intelligence or planning.

Watch: Iran shoots down U.S. drone amid growing tensions 

Donald Trump downplayed Iran's downing of a U.S. military drone, saying he suspected it was shot by mistake. 1:59

The U.S. Federal Aviation Administration on Thursday issued an emergency order prohibiting U.S. operators from flying in an area of Tehran-controlled airspace over the Strait of Hormuz and Gulf of Oman. Some other international airlines are taking related precautions.

But Iran said on Saturday its airspace was "safe and secure" for all planes to cross, Tasnim reported.

Separately, Iran has executed a former contract employee for the aerospace organization of the Ministry of Defence on charges of spying for the U.S. Central Intelligence Agency, the IRIB news agency reported on Saturday.

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