US President Donald Trump said on Sunday he was not seeking war after a senior Iranian military commander warned any conflict may spread uncontrollably and threaten the lives of US troops.
Tensions remain high after Trump said on Friday he aborted a military strike to retaliate for Iran's downing of an unmanned US drone because it could have killed 150 people.
"I'm not looking for war," Trump said on NBC's Meet the Press program.
Trump has said he will impose further sanctions on Iran from Monday but has also indicated that he would be prepared to seek a deal to bolster its flagging economy, an apparent move to defuse tensions.
"I think they want to negotiate. And I think they want to make a deal. And my deal is nuclear. Look, they're not going to have a nuclear weapon," he added.
"I don't think they like the position they're in. Their economy is, is absolutely broken."
Relations in the region began to worsen significantly when Trump pulled out of a 2015 nuclear deal between Iran and six powers and reimposed sanctions on the country. The sanctions had been lifted under the pact in return for Tehran curbing its nuclear program.
Iran has said it would respond firmly to any threat against it and warned on Sunday of the risks of a military confrontation.
"If a conflict breaks out in the region, no country would be able to manage its scope and timing," Major General Gholamali Rashid said, according to the semi-official Fars news agency.
"The American government must act responsibly to protect the lives of American troops by avoiding misconduct in the region."
Iranian President Hassan Rouhani accused the Americans of stoking tensions through what Iran has called the violation of its airspace by the US military drone, the semi-official Fars news agency reported.
Washington said the aircraft was targeted in international air space in "an unprovoked attack".
United Nations chief Antonio Guterres warned that it is essential to avoid "any form of escalation" in the Gulf.
"The world cannot afford a major confrontation the Gulf," Guterres said on the sidelines of the World Conference of Ministers Responsible for Youth in Lisbon. "Everybody must keep nerves of steel."
