'Don't play with the lion's tail': Rouhani to Trump

Iranian President Hassan Rouhani on Sunday cautioned U.S. President Donald Trump about pursuing hostile policies against Tehran, saying "America should know ... war with Iran is the mother of all wars," but he did not rule out peace between the two countries, either.

Iran faces increased U.S. pressure and looming sanctions after Trump's decision to withdraw the United States from a 2015 international deal over Iran's nuclear programme.

Addressing a gathering of Iranian diplomats, Rouhani said: "Mr Trump, don't play with the lion's tail, this would only lead to regret," the state new agency IRNA reported.

Rouhani scoffed at Trump's threat to halt Iranian oil exports and said Iran has a dominant position in the Gulf and the Strait of Hormuz, a major oil shipping waterway.

"Anyone who understands the rudiments of politics doesn't say 'we will stop Iran's oil exports'...we have been the guarantor of the regional waterway's security throughout history," Rouhani said, cited by the semi-official ISNA news agency.

Iran's Supreme Leader Ayatollah Ali Khamenei on Saturday backed Rouhani's suggestion that Iran may block Gulf oil exports if its own exports are halted.

Rouhani's apparent threat earlier this month to disrupt oil shipments from neighbouring countries came in reaction to efforts by Washington to force all countries to stop buying Iranian oil.

Iranian officials have in the past threatened to block the Strait of Hormuz in retaliation for any hostile U.S. action. Separately, a top Iranian military commander warned that the Trump government might be preparing to invade Iran.

"The enemy's behaviour is unpredictable," military chief of staff General Mohammad Baqeri said, the semi-official Tasnim news agency reported.

"Although the current American government does not seem to speak of a military threat, according to precise information it has been trying to persuade the U.S. military to launch a military invasion (of Iran)," Baqeri said.

Iran's oil exports could fall by as much as two-thirds by the end of the year because of new U.S. sanctions, putting oil markets under huge strain amid supply outages elsewhere.

Washington initially planned to totally shut Iran out of global oil markets after Trump abandoned the deal that limited Iran's nuclear ambitions, demanding all other countries to stop buying its crude by November.

But it has somewhat eased its stance since, saying that it may grant sanction waivers to some allies that are particularly reliant on Iranian supplies.