Trump announces new 'hard-hitting' sanctions on Iranian leaders

New York: Iran has slammed the Trump administration over new US sanctions targeting the Islamic Republic's supreme leader and other top officials, with the Foreign Ministry saying the measures spell "permanent closure" of diplomacy between Tehran and Washington.

US President Donald Trump has announced new financial sanctions on Iran's most senior leaders and military officials on Monday following the shooting down of a US drone last week.

The decision reinforces Trump's preferred strategy of attempting to change Iran's behaviour through economic damage rather than through military action. Trump last week called off a planned retaliatory strike on Iranian facilities at the last minute after learning the operation would result in 150 deaths.

The announcement came as US Secretary of State Mike Pompeo departed for a trip to the Middle East and Asia to try to build a global coalition against Iran.

Trump said the "hard-hitting" sanctions would deny Iran's Supreme Leader Ayatollah Ali Khamenei and his allies access to key financial resources and support.

"We will continue to increase pressure on Tehran,” Trump said on Monday, local time, as he prepared to sign an executive order in the Oval Office.

"We do not seek conflict with Iran or any other country. I think a lot of restraint has been shown by us, but that doesn’t mean we’re going to show it in the future."

Trump added: "Never can Iran have a nuclear weapon."

President Donald Trump holds up a signed executive order to increase sanctions on Iran.Credit: AP

Treasury Secretary Steve Mnuchin said the sanctions would "lock up literally billions of dollars of assets".

The Treasury Department later announced that its Office of Foreign Assets Control had taken action against eight senior commanders of Iran's Islamic Revolutionary Guards Corps (IRGC).

"The United States is targeting those responsible for effectuating the Iranian regime’s destructive influence in the Middle East," Mnuchin said in a statement.

"This action is a warning to officials at all levels of the IRGC and the rest of the Iranian regime that we will continue to sanction those who export violence, sabotage, and terrorism."

Asked whether the new sanctions were a response to Iran’s downing of the unmanned drone over the Strait of Hormuz last week, Trump said that "you could probably add that into this".

But then he said: "This is something that was going to happen anyway."

In a tweet following the announcement Iran's Foreign Minister Mohammad Zari said that hawkish members of the Trump administration - whom he called the "B team" - wanted war rather than diplomacy.

"@realDonaldTrump is 100% right that the US military has no business in the Persian Gulf. Removal of its forces is fully in line with interests of US and the world. But it's now clear that the #B_Team is not concerned with US interests—they despise diplomacy, and thirst for war," he tweeted.

Before the announcement, Iranian officials downplayed the prospect of new sanctions.

They were "just propaganda, as all sanctions ... have been imposed and there are no more sanctions left", the state-run news agency IRIB quoted Foreign Ministry spokesman Abbas Mousavi as saying.

But on Tuesday, Iran's state-run IRNA news agency Mousavi as saying that Trump's move meant the end of diplomacy between the two countries.

"The fruitless sanctions on Iran's leadership and the chief of Iranian diplomacy mean the permanent closure of the road of diplomacy with the frustrated US administration," Mousavi said.

Pompeo, America's top diplomat, is travelling to Saudi Arabia and the United Arab Emirates before making pre-planned trips to India, Japan and South Korea.

"We'll be talking with them about how to make sure that we are all strategically aligned, and how we can build out a global coalition, a coalition not only throughout the Gulf states, but in Asia and in Europe, that understands this challenge as it is prepared to push back against the world's largest state sponsor of terror," Pompeo said.

with AAP