Iran’s defence minister Amir Hatami today said developing missile capabilities will remain Tehran's top priority despite crippling economic sanctions imposed by the US.

Speaking in Tehran on Saturday, the brigadier general revealed plans to unveil a new fighter jet on National Defence Industry Day on August 22.

"We will present a plane on National Defence Industry Day, and people will see it fly, and the equipment designed for it," Brigadier General Amir Hatami said.

Iran has been talking up its military activity in recent weeks in defiance of sanctions that have plunged is economy into turmoil, undermining its defence.

Earlier this week, Hatami assured Iranians that progress in defence and missile fields would be made regardless of sanctions and threats from abroad.

"The Islamic Republic of Iran's missile power is a defensive deterrent power and as I had promised our dear people, I will not spare any efforts to increase the country's missile capabilities and certainly, we will increase our missile power on a daily basis," Hatami said, addressing a ceremony to unveil a new home-made pin-pointing missile. He added: "What is said about the Islamic Republic's defense and missile power is a cheap and baseless claim and clear meddling, and the great Iranian nation does not allow any foreign power to interfere in its defense and military affairs."

His bellicose comments come after a jaw-dropping tweet by US President Donald Trump threatening Iran with dire consequences “the like of which few throughout history have suffered before”.

The rhetorical exchanges between Iran and the United States have escalated in recent weeks after Trump’s explosive tweet. Relations have soured since under president Trump, whose decision to pull out of the Iran deal – a landmark accord aimed at curbing Tehran’s nuclear weapons programme – has caused consternation.

In the extraordinary tweet that started the war of words, Trump said the US would not tolerate Iran’s “demented words of violence and death”.He posted the late-night tweet just hours after Iranian president Hassan Rouhani launched a personal attack on “bullying” Trump and his hostile stance towards Iran.

Rouhani warned Trump against provoking Iran or risk triggering “the mother of all wars”.

Last month, sources in the Australian government told ABC they believe the United States is prepared to bomb Iran's nuclear facilities in the near future.Australian and Britain would play a key role in identifying targets in Iran, the source told ABC.

"Developing a picture is very different to actually participating in a strike," the source said."Providing intelligence and understanding as to what is happening on the ground so that the Government and allied governments are fully informed to make decisions is different to active targeting."US secretary of defence Jim Mattis dismissed the report as “fiction”.