New US sanctions against Iran's supreme leader and foreign minister have closed off diplomacy, Iran said on Tuesday, blaming the United States for abandoning the only route to peace just days after the two foes came within minutes of conflict.

US President Donald Trump signed an executive order imposing sanctions on Monday against Supreme Leader Ayatollah Ali Khamenei and other senior figures. Sanctions against Foreign Minister Mohmmad Javad Zarif are expected later this week.

The moves came after Iran shot down a U.S. drone last week and Mr Trump called off a retaliatory air strike minutes before impact, which would have been the first time the United States had bombed Iran in decades of hostility between them.

Mr Trump said he decided at the last minute that too many people would die.

In a televised address, President Hassan Rouhani said sanctions against Khamenei would have no practical impact because the cleric had no assets abroad.

Rouhani, a pragmatist who won two elections on promises to open Iran up to the world, described the US moves as desperate and called the White House "mentally retarded" - an insult Iranian officials have used in the past about Trump but a departure from Rouhani's own comparatively measured tone.

Rouhani and his cabinet run Iran's day-to-day affairs, while Khamenei, in power since 1989, is Iran's ultimate authority.

"The White House actions mean it is mentally retarded," Rouhani said. "Tehran's strategic patience does not mean we have fear."

Russian Foreign Minister Sergei Lavrov said the situation around Iran was developing toward a dangerous scenario, RIA news agency reported.

End of diplomacy

Earlier Iran said the sanctions on its leaders represent the "permanent closure" of diplomacy with Washington.

"Imposing fruitless sanctions against Iran's supreme leader and the commander of Iran's diplomacy is the permanent closure of the path to diplomacy with Trump's desperate government," ministry spokesman Abbas Mousavi said in a tweet.

"Trump's government is destroying all established international mechanisms for keeping global peace and security," he added.

US President Donald Trump targeted Iranian Supreme Leader Ayatollah Ali Khamenei and other senior Iranian officials, looking for a fresh blow to Iran's economy after Tehran's downing of an unmanned American drone.

With tensions running high between the two countries, Mr Trump signed an executive order imposing the sanctions, which US Treasury Secretary Steven Mnuchin said would lock billions of dollars more in Iranian assets.

Mr Trump told reporters that the sanctions were in part a response to last week's downing of a US drone by Iran, but would have happened anyway.

He said Khamenei was ultimately responsible for what Mr Trump called "the hostile conduct of the regime" in the Middle East.

"Sanctions imposed through the executive order ... will deny the Supreme Leader and the Supreme Leader's office, and those closely affiliated with him and the office, access to key financial resources and support," Mr Trump said.

The sanctions are aimed at denying Iran’s leadership access to financial resources, blocking them from using the United States financial system or having access to any assets in the United States.

"Anybody who conducts significant transactions with these sanctioned individuals may be exposed to sanctions themselves," the White House said.

Russia sides with Iran in downed US drone

Russia has backed Iran's account of the downed US drone with head of Russia's Security Council saying that it was shot down in Iranian airspace.

"I have information from the defence ministry of the Russian Federation that this drone was in Iranian airspace," Russian news agencies quoted Nikolai Patrushev as telling reporters in Jerusalem.

Patrushev was in Jerusalem for talks with US and Israeli officials, as tensions run high after Iran shot down the US spy drone on June 19 and US President Donald Trump considered, then cancelled, a retaliatory strike.

Iran insists the drone violated Iranian airspace near the Strait of Hormuz, but the Pentagon denies it entered Iranian territory.

'Maximum pressure'

Some policy analysts say that earlier sanctions issued under Mr Trump's "maximum pressure" campaign are why Iran has felt compelled to adopt more aggressive tactics as its economy feels the crunch.

The Trump administration wants to force Tehran to open talks on its nuclear and missile programs and its activities in the region.

Tensions between the United States and Iran have grown since May when Washington ordered all countries to halt imports of Iranian oil. Iran says it will not be forced to the negotiating table.

"We call on the regime to abandon its nuclear ambitions, change its destructive behaviour, respect the rights of its people, and return in good faith to the negotiating table," Mr Trump said in a statement issued along with the text of the executive order.

Iran's hard-line semi-official Tasnim and Fars news agencies said the sanctions imposed on Tehran were based on "fabricated excuses".

Mr Mnuchin said Iranian Foreign Minister Mohammad Javad Zarif would be targeted with US sanctions later this week.

Sanctions were also imposed on eight senior commanders of Navy, Aerospace, and Ground Forces of the Islamic Revolutionary Guards Corps (IRGC), the US Treasury Department said.

"These commanders sit atop a bureaucracy that supervises the IRGC’s malicious regional activities, including its provocative ballistic missile program, harassment and sabotage of commercial vessels in international waters, and its destabilizing presence in Syria," the department said in a statement.

Mr Trump said the sanctions are a "strong and proportionate response to Iran's increasingly provocative actions".

"We will continue to increase pressure on Tehran until the regime abandons its dangerous activities and its aspirations," he said.

Iran said on Monday US cyber attacks on its military had failed, as Washington sought to rally support in the Middle East and Europe for a hard-line stance that has brought it to the verge of conflict with its longtime foe.

Maritime security

Washington has blamed Tehran for attacks on tankers in the Gulf in recent weeks, which Iran denies.

On Monday, the United States said it was building a coalition with allies to protect Gulf shipping lanes.

A coalition of nations would provide both material and financial contributions to the program, a senior US State Department official said, without identifying the countries.

"It's about proactive deterrence because the Iranians just want to go out and do what they want to do and say hey we didn't do it. We know what they've done," the official told reporters, adding that the deterrents would include cameras, binoculars and ships.

The United States accuses Iran of encouraging allies in Yemen to attack Saudi targets.

In a joint statement on Monday, the United States, Saudi Arabia, the UAE and Britain expressed concern over Middle East tensions and the dangers posed by Iranian "destabilising activity" to peace and security in Yemen and the region.

The confrontation between Iran and the United States heated up last Thursday when Iran shot down an American drone, saying it had flown over its air space.

Washington, which said the drone was in international skies, then appeared to come close to attacking Iranian military targets, with Mr Trump saying that he aborted a retaliatory air strike 10 minutes before it was to go ahead.

Mr Trump said he decided the strike would have killed too many people.

Fears of war

US media have reported that Washington launched cyber attacks last week even as Mr Trump called off his air strike. US officials have declined to comment.

Iran dismissed the cyber attacks as a failure.

"They try hard, but have not carried out a successful attack," Mohammad Javad Azari Jahromi, Iran's minister for information and communications technology, said on Twitter.

Allies of the United States have been calling for steps to defuse the crisis, saying they fear a small mistake by either side could trigger war.

"We are very concerned. We don't think either side wants a war, but we are very concerned that we could get into an accidental war and we are doing everything we can to ratchet things down," British Foreign Secretary Jeremy Hunt said.

US Secretary of State Mike Pompeo jetted to the Middle East to discuss Iran with the leaders of Saudi Arabia and the United Arab Emirates, two Gulf Arab allies that favour a hard line. Pompeo met King Salman as well as the king's son, de facto ruler Crown Prince Mohammed bin Salman.

The US special representative for Iran, Brian Hook, visited Oman and was headed to Europe to explain U.S. policy to allies. He told European reporters on a phone call ahead of his arrival that Mr Trump was willing to sit down with Iran, but that Iran must do a deal before sanctions could be lifted

US-Iran relations have deteriorated over the past year since the United States abandoned a 2015 agreement between Iran and world powers designed to curb Iran's nuclear program in return for the lifting of sanctions.

US allies in Europe and Asia view Mr Trump's decision to abandon the nuclear deal as a mistake that strengthens hardliners in Iran and weakens the pragmatic faction of President Hassan Rouhani.

France, Britain and Germany have sent an official diplomatic warning to Iran if Tehran reduces its compliance with the accord, two European diplomats said on Monday.

It was not immediately clear what consequences Iran might face for non-compliance.

Washington argues that the agreement known as the JCPOA, negotiated under Mr Trump's predecessor, President Barack Obama, did not go far enough. Both sides have suggested they are willing to hold talks while demanding the other side move first.