as the US continues to build up its forces nearby. "The Americans should know that if they start a war, this time it will be a regional war", Khamenei was quoted as saying by the semi-official Tasnim news agency.

Donald Trump earlier said Iran was in "serious discussions" and he hoped they would lead to something "acceptable", while Iran's Foreign Minister Abbas Araghchi told CNN he was "confident that we can achieve a deal" on Tehran's nuclear programme.

Trump has threatened to intervene in Iran over its nuclear ambitions and after its deadly crackdown on anti-government protests. Araghchi said: "Unfortunately, we have lost our trust [in] the US as a negotiating partner," but added the exchange of messages through friendly countries in the region was facilitating "fruitful" talks with Washington.

Iran's top security official Ali Larijani had previously said a framework for negotiations was progressing. As part of its build up of forces, the US has sent its aircraft carrier the USS Abraham Lincoln to the region and late last week US Central Command said it was operating in the Arabian Sea. "[Trump] regularly says that he brought ships... The Iranian nation shall not be scared by these things," added Khamenei.

Iran had been expected to begin a two-day live-fire naval exercise on Sunday in the Strait of Hormuz - one of the world's most important shipping lanes and a key route for energy supplies. However on Sunday Reuters quoted an Iranian official as saying the Iranian Revolutionary Guards Corps (IRGC) navy had no plans for such an exercise.

Around a fifth of the world's traded oil passes through the waterway, which is about 33km (21 miles) wide at its narrowest point between Iran and Oman. Iran has in the past threatened to close the strait if it were attacked. The US has warned Iran against any "unsafe and unprofessional behaviour" near its forces in the area.

Araghchi responded by saying: "The US military is now attempting to dictate how our Powerful Armed Forces should conduct target practice in their own turf". On Saturday, two explosions in Iran heightened anxiety in the country. Local authorities said a blast that killed one and hurt 14 at a building in the southern port city of Bandar Abbas was caused by a gas leak.

Tasnim denied social media reports that a Revolutionary Guards Corps navy commander had been targeted in the blast. In the south-western city of Ahvaz, at least four people were killed in another explosion, with local authorities again blaming a gas leak, according to Iran's Tehran Times. (BBC)