Donald Trump signed "hard hitting" sanctions against Iran's supreme leader Ali Khamenei in the latest round of a stand-off that has brought the United States and the Islamic Republic to the brink of war.

The US president said the sanctions will deny access to "key financial resources and support" for the supreme leader, his office and those "closely affiliated" with him.

Steven Mnuchin, the US Treasury secretary, said that while the sanctions had been prepared for some time they were enlarged as a result of recent Iranian hostile actions.

"We do not ask for conflict," Mr Trump said as he signed the order, adding: "Never can Iran have a nuclear weapon."

Iran and the United States very nearly plunged into open warfare last week after Iran shot down a US surveillance drone over the Strait of Hormuz.

On Friday Mr Trump said he had cancelled retaliatory military strikes at the last minute after learning they could kill 150 people, but promised new sanctions instead.