"I hope we don't, but we're in a very strong position if something should happen," Trump told Fox Business Network when asked if a war was brewing.

"I'm not talking boots on the ground ... I'm just saying if something would happen, it wouldn't last very long."

Tensions between the two countries have escalated in recent weeks after Washington blamed Tehran for attacks on two oil tankers, followed by the downing of a US surveillance drone off Iran's coast.

Iran denied the tanker attacks but said the drone was in its airspace.

Trump later called off a counter-strike, saying it would have killed too many Iranians.

The rhetoric between the sides has heated up, with Trump this week threatening "obliteration" of Iran after Iranian President Hassan Rouhani on Tuesday said the White House's actions were "mentally retarded."

"I don't think their leadership is smart," Trump told Fox Business Network on Wednesday. "Iran is going down the tubes," he added, citing biting US sanctions as well as unrest in the country and other economic pressures.