US National Security Adviser John Bolton said on Wednesday that Washington was not seeking to oust Iran's leadership and that renewed sanctions were having a stronger impact on Tehran than anticipated.
Mr Bolton's comments come after months of pressure from the US government, following Donald Trump's decision to abandon a global nuclear deal with Iran.
"Regime change in Iran is not American policy but what we want is massive change in the regime's behaviour," Mr Bolton said during a visit to Jerusalem, adding that Tehran's activity in the Middle East is threatening.
The Trump administration reimposed sanctions this month after withdrawing from the 2015 international nuclear agreement with Iran. The Trump government has said the accord failed to deny Tehran the means to make a nuclear bomb and acted as a spur to its interference in the affairs of neighbouring countries.
Mr Bolton, who has previously called for for regime change in Iran, said that the fall of the government was not US policy.
"What we want is massive change in the regime's behaviour," he said.
However, Mr Bolton said in a Reuters interview: "Iranian activity in the region has continued to be belligerent — what they are doing in Iraq, what they are doing in Syria, what they are doing with Hezbollah in Lebanon, what they are doing in Yemen, what they have threatened to do in the Strait of Hormuz."
Tehran, he said, has been acting as a "central bank" for terrorism since 1979, the year that the Shah was toppled and an Islamic Republic founded by Ruhollah Khomeini.
Mr Trump has warned that Washington would target Iran's oil sales and banking sector by issuing another round of sanctions in November. He has also said there would be serious consequences for those who did not respect the embargo.
“We expect that Europeans will see, as businesses all over Europe are seeing, that the choice between doing business with Iran or doing business with the United States is very clear to them," he said.
The pact between Iran and world powers lifted the nuclear-related sanctions that had been throttling the Iranian economy. In return, Iran accepted restrictions on its nuclear activities, increasing the time it would need to produce an atomic bomb — if it chose to do so. Tehran has always denied pursuing a bomb, maintaining that its nuclear programme is for peaceful energy production.
"There should not be any doubt that the United States wants this resolved peacefully, but we are fully prepared for any contingency that Iran creates,” Mr Bolton said.
Amid a deteriorating outlook between Washington and Tehran, a senior Iranian cleric on Wednesday said the US and Israel would be targeted if either power attacked Iran.
Ahmad Khatami also told worshippers attending Eid prayers in Tehran that Mr Trump’s offer of talks with Iranian leaders was unacceptable, as the US leader wanted Iran to concede on its missile programme and regional influence.
"Americans say you should accept what we say in the talks. So this is not negotiation, but dictatorship. The Islamic Republic and the Iranian nation would stand up against dictatorship," Mr Khatami was quoted as saying by Mizan news agency.
"The price of a war with Iran is very high for America. They know if they harm this country and this state in the slightest way, the United States and its main ally in the region, the Zionist regime [Israel] would be targeted."
He did not elaborate on which forces would carry out such attacks, but Iran has said it could target Israeli cities with its missiles if it was threatened. Iran also has proxies in the region, including Lebanon's Hezbollah group.
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