Donald Trump says it is just more lies and propaganda. (File photo)

US President Donald Trump on Monday denied Iran's claim that it dismantled a CIA spy ring and arrested 17 suspects with alleged links to the US intelligence agency.

"The report of Iran capturing CIA spies is totally false. Zero truth," Trump tweeted.

"Just more lies and propaganda (like their shot down drone) put out by a Religious Regime that is Badly Failing and has no idea what to do."

"Their Economy is dead, and will get much worse. Iran is a total mess!" Trump added.

Earlier Monday a top Iranian counter-intelligence official told local reporters that the 17 suspects were all Iranians working in "sensitive centers" and the private sector who had acted independently of each other.

Some have been tried and sentenced to death.

The CIA had no immediate comment, and usually refuses to comment on reports of its covert agents and informants falling under arrest or being killed in the field.

Trump's denial was extraordinary in that sense, and drew criticism from the intelligence community.

"There's a reason the government NEVER comments on such claims. The next time an allegation goes unanswered, it will be assumed to be true," tweeted former National Security Council spokesman Ned Price.