After issuing threat, Trump says he does not see war with Iran happening

Hours after upping the ante against Iran on Twitter, US President Donald Trump has said he is not gearing up for war with Tehran adding that he prefers peace.

Trump made these remarks while speaking to media as he arrived at the grand ballroom at Mar-a-Lago for a New Year bash on Tuesday night, Russia Today reported.

"War with Iran? I don't think that would be a good idea for Iran...I like peace...I don't see that happening," Trump said.

Earlier in the day, Trump blamed Iran for the attack on the US embassy in Baghdad and said that the Islamic Republic will have to pay a big price if any American is killed.

Dozens of protesters broke into the US embassy compound in Baghdad, smashed windows, set fire to outbuildings and overturned vehicles outside the US Embassy, CNN reported.

This development came after the US conducted strikes at five facilities linked to Iranian-backed Kataib Hezbollah militia in Iraq and Syria.

The US ambassador to Iraq and other staff were evacuated from the embassy.

Earlier, hundreds of protesters gathered outside the embassy shortly after funerals were held for fighters of Kataib Hezbollah militia killed in Sunday night strikes that the Pentagon launched in response to a rocket attack on a Kirkuk base.