Trump warns of severe action against Iran as Tehran vows retaliation ahead of UN meeting

President Donald Trump told Fox News that the United States faces only two options regarding Iran: allowing its economy to collapse or taking action to remove its leadership, unless a diplomatic agreement is reached. He added that he was in "deciding mode" about possible measures and expressed willingness to meet Iranian President Masoud Pezeshkian during the United Nations General Assembly in New York.

Iran's military intelligence agency warned that a large-scale strike by the United States and its allies would trigger "painful" retaliation across the Middle East, stating that any regional country supporting such a strike would be treated as a party to the conflict. The Khatam al-Anbia Central Headquarters said, "If the U.S. makes any mistake against the Islamic Republic of Iran, all its positions and interests in the region will be targeted by sustained, effective and painful attacks."

The exchange comes as a seven-month diplomatic effort stalls after a June memorandum collapsed. Iran’s president is scheduled to attend the UN General Assembly and hold side-meeting with world leaders. The U.S. State Department issued a security alert warning of possible escalation in the region and advised Americans to remain vigilant.

Separately, Houthi militants, backed by Iran, claimed missile and drone attacks on Riyadh, prompting Saudi Arabia to intercept a ballistic missile and report no casualties. Oil markets have seen Brent crude dip 1.7% to $102.15 per barrel and U.S. West Texas Intermediate fall 1.8% to $98.46, though analysts expect prices to stay in a $90-$110 range for the remainder of the year.

Iranian parliament speaker Mohammad Bagher Ghalibaf said the country must continue both fighting and negotiating, pursuing diplomacy only when it holds a battlefield advantage.