US President Donald Trump has warned that firms doing business with Iran will be barred from trade with the United States.

The threat came as new US sanctions on Iran took effect despite pleas from Washington's allies.

Key points: Trump says sanctions "most biting ever"

Trump says sanctions "most biting ever" Iran dismissed US calls for talks

Iran dismissed US calls for talks European countries want Iran to keep respecting earlier deal

Iran dismissed a last-minute offer from the Trump administration for talks, saying it could not negotiate while Washington had reneged on a 2015 deal to lift sanctions in return for curbs on Iran's nuclear program.

Mr Trump decided this year to pull out of the agreement, ignoring pleas from other world powers that had co-sponsored the deal, including Washington's main European allies Britain, France and Germany, as well as Russia and China.

European countries, hoping to persuade Tehran to continue to respect the deal, have promised to try to lessen the blow of sanctions and to urge their firms not to pull out.

But that has proven difficult, with European companies quitting Iran, arguing they cannot risk their US business.

"These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level," Mr Trump tweeted.

"Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!"

White House national security adviser John Bolton said on Monday Iran's only chance of escaping sanctions would be to take up an offer to negotiate with Mr Trump for a tougher deal.

"If the ayatollahs want to get out from under the squeeze, they should come and sit down," Mr Bolton, one of the administration's main hawks on Iran, told Fox News.

"The pressure will not relent while the negotiations go on."

Sorry, this video has expired Bolton: Iran sanctions beginning to bite

On Tuesday, Mr Bolton said the sanctions were already working, deterring European companies.

"The European governments are still holding to the nuclear deal, but honestly their businesses are running from it as fast as they can so that the effect of the American sanctions really is proceeding regardless," he said.

Iran to abide by deal for now

Washington accepts Iran has complied with the terms of the 2015 deal reached under former president Barack Obama, but says the agreement is flawed because it is not strenuous enough.

Iran said it would continue to abide by the deal for now, if other countries could help protect it from the economic impact of Washington's decision to pull out.

Tuesday's sanctions target Iran's purchases of US dollars, metals trading, coal, industrial software and auto sector.

In a speech hours before the sanctions were due to take effect, Iran's President Hassan Rouhani rejected negotiations as long as Washington was no longer complying with the deal.

"If you stab someone with a knife and then you say you want talks, then the first thing you have to do is remove the knife," Mr Rouhani said in a speech broadcast live on state television.

Britain, France, Germany and the EU as a bloc said in a joint statement on Monday: "We deeply regret the reimposition of sanctions by the US."

Sorry, this video has expired Iran dismisses US call for talks

Few American companies do much business in Iran so the impact of sanctions mainly stems from Washington's ability to block European and Asian firms from trading there.

Among large European companies that have suspended plans to invest in Iran are France's oil major Total and its big carmakers PSA and Renault.

"We have ceased our already restricted activities in Iran in accordance with the applicable sanctions," said German car and truck manufacturer Daimler.

Reuters/ABC