Washington: Trump said on Thursday that the damages, which could be “very substantial”, should be paid using “Iranian money that the United States has in its possession and controls”.

“This is the fair and equitable thing to do,” Trump wrote on his Truth Social platform.

Iranian Foreign Minister Abbas Araghchi strongly rejected the proposal, warning that seizing another country’s assets to settle unrelated future claims would establish an “incendiary precedent”.

“Ensuing chaos will not be pretty or peaceful,” Araghchi added.

The latest exchange comes weeks after the United States and Iran agreed to a 14-point Memorandum of Understanding aimed at halting military operations, reopening the Strait of Hormuz and negotiating an end to the conflict within 60 days.