US President Donald Trump has issued a stern warning to Iran, that it will be destroyed if a conflict breaks out between the two countries.
Trump said in a tweet on Sunday that if Iran wants to fight, that will be its official end.
The US has deployed additional warships and planes to the gulf in recent days.
Iran has also moved to talk down concerns over the escalating tensions. On Saturday, its Foreign Minister insisted there was no appetite for war.
The latest frictions come after Iran suspended its commitments under the 2015 international nuclear deal, and threatened to resume production of enriched uranium which is used to make reactor fuel and nuclear weapons.
Tehran has allegedly placed missiles on boats in the gulf, and US investigators reportedly believe the country damaged four tankers off the coast of the United Arab Emirates, claims Iran has denied.
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