Washington DC - Donald Trump said Friday that Iran faces severe consequences if it fails to reach a nuclear deal, after Tehran responded to a letter from the US president calling for talks.

"I sent them a letter just recently, and I said: you have to make a decision, one way or the other, and we either have to talk and talk it out or very bad things are going to happen to Iran," Trump told reporters in the Oval Office.

"I don't want that to happen. My big preference – and I don't say this through strength or weakness – my big preference is, we work it out with Iran. But if we don't work it out, bad bad things are going to happen to Iran."

Trump, who in 2018 pulled the US out of an agreement to relieve sanctions on Iran in return for curbs on its nuclear program, now says he is open to talks on a deal that could reduce the risk of military escalation.

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The US president revealed at the start of March that he had sent a letter to Iran's supreme leader Ayatollah Ali Khamenei.

At the same time, Trump has pushed ahead with his "maximum pressure" program of additional sanctions on Tehran and the threat of military action if it refuses to negotiate.

Tehran has refused to negotiate directly with Washington under these circumstances, but has held out the possibility of indirect talks.

On Thursday, Iran's Foreign Minister Abbas Araghchi told the official IRNA news agency that he had delivered a letter responding to Trump's outreach to Oman, which has served as an intermediary in the past in the absence of US-Iran diplomatic relations.