U.S. President Donald Trump fired top federal government lawyer Sally Yates on Monday after she took the extraordinarily rare step of defying the White House and refused to defend new travel restrictions targeting seven Muslim-majority nations.

It was another dramatic twist in the unusually raucous roll-out of Trump's directive that put a 120-day hold on allowing refugees into the country, an indefinite ban on refugees from Syria and a 90-day bar on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen.

The Friday night ban prompted protests and chaos at airports on the weekend as customs officials struggled to put the order into practise, and the fallout spread to U.S. markets on Monday, where stocks suffered their biggest drop of 2017 and companies affected by the change spoke out against it.

Yates said late on Monday that the Justice Department would not defend the order against court challenges, saying that she did not believe it would be "consistent with this institution's solemn obligation to always seek justice and stand for what is right."

Hours later, she was fired. The White House said Yates "has betrayed the Department of Justice by refusing to enforce a legal order designed to protect the citizens of the United States" and portrayed her actions as political.

Trump has argued tougher vetting of immigrants is needed to protect America from terror attacks but critics complain that his order unfairly singles out Muslims and defiles America's historic reputation as a welcoming place for immigrants.

Yates, an appointee of former Democratic President Barack Obama, was days away from being replaced by Trump's pick for the top spot at the Justice Department, Republican Senator Jeff Sessions, who is awaiting Senate confirmation.

"Ms. Yates is an Obama Administration appointee who is weak on borders and very weak on illegal immigration," the White House said in a statement.

The White House said that Dana Boente, U.S. Attorney for the Eastern District of Virginia, was sworn in at 9 p.m. ET and would be acting U.S. attorney general until Sessions is approved.

Boente said in an interview with the Washington Post that he would enforce the immigration order.