Iranian leader accuses US of 'psychological warfare'

U.S. President Donald Trump and Iranian President Hassan Rouhani. Photo / AP

Iran's President Hassan Rouhani has called the reinstatement of US economic sanctions "psychological warfare" and said their aim was to "sow division among Iranians".

The measures came into effect yesterday under an executive order signed by President Donald Trump, targeting financial transactions that involve US dollars, Iran's automotive sector, the purchase of commercial planes and metals including gold. US sanctions targeting Iran's oil sector and central bank are to be reimposed in early November.

The Iranian sanctions are the latest in a series of actions Trump has taken to reverse programs that formed the backbone of President Barack Obama's legacy. The US this year withdrew from the Joint Comprehensive Plan of Action, also known as the Iran nuclear deal, which Obama championed and Trump has frequently criticised.

Rouhani said the US Government had "turned their back on diplomacy" with the action. "They want to launch psychological warfare against the Iranian nation," Rouhani said.

"Negotiations with sanctions doesn't make sense. We are always in favour of diplomacy and talks ... but talks need honesty."

The foreign ministers of Germany, Britain and France said in a statement yesterday that the nuclear deal remained "crucial" to global security.

They unveiled a "blocking statute" whose aim is to protect European businesses doing business with Iran despite the new US sanctions.

Trump warned that those who don't wind down their economic ties to Iran "risk severe consequences".

However, the European foreign ministers, and Federica Mogherini, the European Union's foreign policy chief, said the accord "is working and delivering on its goal" of limiting Iran's nuclear programme.

A senior White House official said the US was "not particularly concerned" by EU efforts to protect European firms from the sanctions.

Rouhani, meanwhile, said that Iran still can rely on China and Russia to keep its oil and banking sectors afloat.

- Agencies