Washington (CNN) Fresh fury flying between President Donald Trump and Iran shows why the threat of a disastrous war was not averted by his last minute decision to call off "cocked and loaded" US air strikes to avenge the downing of a US drone last week.

Iran reacted furiously on Tuesday to a new set of sanctions imposed by Washington, including on Supreme Leader Ayatollah Ali Khamenei, by accusing the US of suffering a "mental disability."

In response, Trump fired off an inflammatory swipe on Twitter, warning that some Iranian forces would face "obliteration" if it attacked any Americans. The blast recalled the President's threat to rain "fire and fury" on North Korea. That confrontation eventually ceded to negotiations, but there are no signs Iran plans to follow Kim Jong Un's example.

The administration cranked up economic pressure that is already devastating Iran's economy Monday with the new sanctions also targeting Iran's top military brass and its top diplomat in a manner that casts new doubt over the sincerity of its offer of talks with the Islamic Republic.

Iranian President Hassan Rouhani Tuesday accused the White House of "suffering from a mental disability."

"You say you really want to hold talks with us but at the same time you're saying that you want to boycott and sanction our foreign minister, so you're lying," Rouhani said.

Iranian Foreign Ministry spokesman Abbas Mousavi said on Twitter that the latest sanctions will result in "closing (the) channel of diplomacy forever," according to Iranian state-run television Press TV.

Trump slammed Iran's "very ignorant and insulting statement" that he said "only shows that they do not understand reality.

"Any attack by Iran on anything American will be met with great and overwhelming force. In some areas, overwhelming will mean obliteration. No more John Kerry & Obama!" Trump tweeted.

His team, which insists it is not bent on regime change, reasons it can damage Iran's economy badly enough that it will be so desperate it will agree to all of Washington's demands. Alternatively, if Iran's clerical government collapses from within, so much the better. There's little outward sign of that happening so far, though, despite the effectiveness of US sanctions in crushing the economy.

Either huge bet relies on a debatable view of how Iran will see its interests, and may underplay its sense of national pride and lessons of history.

There's little disagreement among US allies that Iran is a malignant regional actor, supports terrorism and poses a threat with its missile program. But supporters of the deal the Obama administration negotiated reasoned it was still worth putting a freeze on its nuclear program for a decade or more.

Trump's critics fear that the relentless US battering may leave the Iranians little incentive to return to a diplomatic process they accuse the President of betraying by exiting the agreement.

Future flash points

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The most alarming scenarios for what happens next could unfold if Iran refuses Trump's offer of talks -- which is not accompanied by any kind of economic or diplomatic carrot.

Should Iran not capitulate to US pressure, and instead seek its own ways to respond to the US, it could provoke further flashpoints and rising tensions that spill over into war.

"(US pressure) will not force the Iranians to come to the table," Richard Haass, president of the Council on Foreign Relations, told CNN's Jake Tapper.

"What it will do is lead the Iranians to do more things to shoot down drones or attack tankers. We will ratchet up sanctions like we did again today," he added. "They will respond, and one of these days, one of us -- more likely Iran -- will go too far and we will feel compelled to respond militarily."

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Iran cannot match US military might. But it can hurt the US. Attacks on tankers, like those it has denied conducting in recent weeks, could hike the price of oil and harm the global economy -- and therefore Trump's reelection hopes.

Proxies of the Iranian Revolutionary Guard Corps in Iraq, Afghanistan and Syria could threaten American troops. US bases and allies are vulnerable to Iranian missile attacks. If Iran decides to return to enriching uranium to levels anywhere near weapons grade, the crisis could burst open.

"What the IRGC is going to do, if past is prologue ... they are going to lash out in asymmetric ways as they have in the past," said retired Maj. Gen. James Spider Marks, a CNN national security commentator.

No preconditions?

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Despite this environment, Trump is insisting that he wants talks with Iranian leaders without preconditions.

"I think a lot of restraint has been shown by us, a lot of restraint. And that doesn't mean we're going to show it in the future. But I felt that we want to give this a chance, give it a good chance," Trump told reporters Monday.

The flaw in the argument is that Iran doesn't see the US offer, such as it is, as a "good chance." While sanctions are seen as an alternative to war in Washington, the distinction is not obvious in Tehran.

"We consider war and sanctions as two sides of the same coin," Hesameddin Ashena, an adviser to Iranian President Hassan Rouhani, said on Monday.

From Iran's point of view, Trump has already imposed conditions on any dialogue, by exiting the nuclear deal with which Tehran was complying, according to US intelligence agencies. The US has also laid out preconditions for a final agreement , which many analysts regard as a fantasy.

"There is no politician in Iran right now that can afford to engage in yet another negotiation with the US in which the US does not deliver on what it promises," Trita Parsi, president of the National Iranian American Council, told CNN.

The US decision to sanction Foreign Minister Javad Zarif, who helped negotiate the nuclear deal, hardly seems designed to encourage Iran to come back to the table.

'Make Iran Great Again'

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Trump's rhetoric, while apparently was designed to open the way to the kind of talks that he brokered with another sworn US foe -- Kim Jong Un of North Korea -- may not be helping either.

"If Iran wants to become a wealthy nation again, become a prosperous nation, let's call it 'Make Iran Great Again' ... it's OK with me," Trump said Saturday.

The notion that the Persian civilization, which dates back more than two millennia, would rely on any American president, least of all Trump, to make it great would come across as offensive to many Iranian ears and is likely to be counterproductive.

Trump's view that a country's greatness equates with wealth -- also evident in his policies toward the Palestinians and North Korea -- may be a treacherous misconception, and may play into Iranian perceptions of the US as a ravenous colonial power.

It could also lead the President to miscalculate if he overlooks other national motives -- like a sense of national destiny -- that could shape Iranian behavior.

And caving to US pressure would force the clerics in Tehran to repudiate the principles of the revolution, which are rooted in hostility to the US and are existential to the regime's survival.

Administration splits

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Hopes of a diplomatic breakthrough may also be hampered by confusion about exactly what US policy is -- a reality that may play into Tehran's hands as it seeks to open fissures within the administration and between the US and its allies.

Trump complained on Monday that the US was protecting global shipping lanes through the narrow, strategic oil gateway of the Strait of Hormuz for "zero compensation."

Just a week ago, Secretary of State Mike Pompeo said on "Fox News Sunday" that "we are going to guarantee freedom of navigation through the strait."

Trump has been blaming a "loose" general for the attack on the US drone, apparently seeking to create room for political maneuver. But Treasury Secretary Steve Mnuchin said one of those being sanctioned was the head of the Iranian air force, who was "responsible for downing the US unmanned aircraft."

The chances of Iran ever sitting down with a delegation that includes national security adviser John Bolton, who called for regime change in Tehran before taking his job, seem unlikely. A cynic might argue that Bolton may be well aware that Trump's calls for dialogue with Iran may be futile and that the hard-line sanctions policy could spark conflict.

In Israel on Sunday, Bolton warned that Iran should not mistake Trump's prudence for "weakness" after he called off military strikes.

Some analysts believe that the best hope for avoiding conflict is if Iran reasons that with a US election just over 16 months away, it may be able to wait out Trump in the hope of a more accommodating Democratic president or a second-term White House staffed by less hawkish subordinates.

The latter theory is partly based on the notion that ultimately Trump -- who campaigned on avoiding foreign entanglements -- will do anything to avoid war with Iran. But the stakes in the confrontation are still huge, and miscalculation by either side remains a present danger.

This story has been updated to include additional developments Tuesday.