Trump warns Iran of grave consequences in case of any misadventure

US President Donald Trump on Tuesday warned Iran of grave consequences in case of any misadventure, amidst rising tensions between Washington and Tehran.

His statement came hours after Iran warned that new US sanctions targeting its supreme leader Ayatollah Ali Khamenei and a string of military commanders meant "closing the doors of diplomacy" between Tehran and Washington.

On Monday, Trump signed an executive order which he said will impose "hard-hitting" sanctions on Iran and deny the Iranian Supreme Leader and other officials access to financial instruments within the US jurisdiction.

"Iran's very ignorant and insulting statement, put out today, only shows that they do not understand reality. Any attack by Iran on anything American will be met with great and overwhelming force," Trump said in a tweet after Iran issued a statement.

"In some areas, overwhelming will mean obliteration. No more John Kerry & Obama!" he said, rejecting the policies of his predecessor Barack Obama and his Secretary of State John Kerry.

The Iranian leadership, he said, does not understand the words "nice" or "compassion", they never have.

"Sadly, the thing they do understand is strength and power, and the USA is by far the most powerful military force in the world, with 1.5 trillion dollars invested over the last two years alone," he tweeted.

Trump said that the "wonderful Iranian people" are suffering, and for no reason at all.

"Their leadership spends all of its money on terror, and little on anything else. The US has not forgotten Iran's use of IED's & EFP's (bombs), which killed 2,000 Americans, and wounded many more," he said.