Iran's president insisted on Wednesday that the United States will achieve nothing with its sanctions campaign after Washington laid out plans to collapse the country's economy.
Almost six months into their war, the two sides are locked in a stalemate, with Iran keeping the key Strait of Hormuz shut and Washington persisting with a naval counter-blockade of Iran.
Under political pressure at home over the impacts of the conflict, US President Donald Trump has pivoted away from military action to economic levers, expanding sanctions and warning of consequences for countries that do not join.
But Iran's leaders have remained defiant, saying they have a two-year plan to counter the pressure, while Iran's army said Wednesday it had rebuilt or replaced all weapons systems damaged during the fighting.
"America will not achieve anything with economic pressure at this stage, just as it was unable to achieve anything in the war," Iranian President Masoud Pezeshkian said Wednesday, according to the country's ISNA news agency.
"We will stand firm against economic pressures, as we have done so far and will continue to do."
Army spokesperson Mohammad Akraminia told state television that the military had replenished its combat capabilities with the reconstruction of all damaged weapons systems and import of new equipment from abroad.
On Monday, US Treasury Secretary Scott Bessent claimed the US had "dismantled Iran's military capabilities, destroyed nearly 100 percent of its military factories, and buried its nuclear program".
- 'Savages' -
The US and Israel launched the war against Iran in late February, vowing to end an alleged Iranian nuclear weapons program and threatening to topple the regime in Tehran.
Iran responded by firing on Gulf countries and closing the Strait of Hormuz, a vital shipping route for global supplies of oil and gas.
The waterway's closure has strained the world economy as shipments fail to reach major markets, pushing up the price of oil and placing pressure on Trump ahead of mid-term elections in November.
Repeated rounds of negotiations brokered by mediators have failed to produce a lasting diplomatic settlement, with a ceasefire collapsing last month.
Trump had frequently claimed a deal was close, but has since backed away from diplomacy, while Israeli Prime Minister Benjamin Netanyahu on Tuesday dismissed any prospect of a deal, calling Iran's leaders "savages".
"I tell you -- an agreement cannot be reached," Netanyahu said, adding that he had discussed the issue with Trump at a recent meeting.
"I doubt, however, that an agreement can be reached with that group there, with those savages."
Announcing the new US economic measures, Bessent said expanded secondary sanctions would target Iran's digital assets and its technology, gold, aviation and shipping sectors.
But Iran's regime has already endured decades of sanctions since its founding in 1979.
- 'Total control' -
The Strait of Hormuz remains at the heart of the dispute between the two sides. Iran says it will not reopen the vital waterway until the US meets its demands, and has frequently attacked vessels.
Tehran has also indicated it intends to impose fees for use of the waterway, which the US and others in the region oppose.
Trump meanwhile insists the US navy has "total control" of the strait and has even called it US territory.
Oman, which sits on the other side of Hormuz, has been discussing with Iran a temporary transit corridor, as laid out in a US-Iran memorandum of understanding signed in June which failed to produce peace.
On Wednesday, Iran's Revolutionary Guards, the ideological arm of the nation's military, said the talks with Oman included the two countries agreeing to share revenues received for management of the strait.
"Some agreements were made regarding the share of each country in the waters of the strait and the share of Iran and Oman in its revenues," said IRGC spokesman Hossein Mohebi, adding that the US was "obstructing work" to finalize the deal.
Omani Foreign Minister Badr Albusaidi said on Tuesday that he hoped his country and Iran would "soon announce" the temporary corridor.
"Future management of the strait and a permanent solution will follow in due course," he wrote on X following talks in Tehran.
