A defiant Iran said it will "proudly bypass" sanctions by the United States that took effect yesterday targeting the Islamic republic's vital oil and financial sectors.

The measures described by Washington as "the toughest sanctions ever" come six months after US President Donald Trump's controversial decision to abandon the multi-nation nuclear deal with Tehran.

"I announce that we will proudly bypass your illegal, unjust sanctions because it's against international regulations," Iran's President Hassan Rouhani said in a televised speech.

"We are in a situation of economic war, confronting a bullying power. I don't think that in the history of America, someone has entered the White House who is so against law and international conventions," he added.

In one of Tehran's bazaars, there was anxiety over the future.

"The shadow of the sanctions has already affected the economy in a disastrous way, people's purchasing power has plunged," said Ehsan Attar in his herbal remedy shop.

"The US is just like a bully, as long as you listen to them they leave you alone, otherwise it will try to suffocate you."

Trump has made Iran a foreign policy priority since taking office, accusing it of spreading terror and seeking to destabilise the Middle East.

He detested the nuclear pact forged by his predecessor Barack Obama and five other world powers, finally deciding to abandon it in May.

Israeli Prime Minister Benjamin Netanyahu yesterday called the start of new US sanctions against Iran a "historic day" that will reduce Tehran's "aggression" in the region.

China denounced new US sanctions and vowed to continue its bilateral trade with the Islamic republic, reported AFP.

'ACT ON YOUR COMMITMENTS'

Trump says he wants a new deal that curbs Iran's missile programme and interventions around the Middle East -- demands that have been flatly rejected by Tehran.

"Constantly they are sending us messages saying 'Let's sit and negotiate.' Negotiations for what?" said Rouhani.

"First, you respect the negotiations we already concluded, so that there are grounds for the next negotiations."

Rouhani said four countries had approached him during his visit to New York for the UN General Assembly in September, offering to mediate with the US but he turned them down.

"There is no need for mediation. There is no need for all these messages. Act on your commitments, and we will sit and talk," he said.

The latest tranche of US sanctions aims to significantly cut Iran's oil exports -- which have already fallen by up to one million barrels a day since May -- and cut off its banks from international finance.

Although the US has given temporary exemptions to eight countries -- including India, Japan and Turkey -- to continue buying oil, it aims to push Iran's sales to zero.

"Our objective is to starve the Iranian regime of the funds it uses to fund violent activity throughout the Middle East and around the world. Our ultimate goal is to encourage them to abandon their revolutionary course," US Secretary of State Mike Pompeo told reporters yesterday.

'EVERYTHING NECESSARY'

The other parties to the nuclear deal -- Britain, France, Germany, China and Russia -- have vehemently opposed the US move and vowed to keep alive the accord, technically known as the Joint Comprehensive Plan of Action (JCPOA).

"We will do everything necessary in the interests of preserving and expanding international trade, economic and financial cooperation with Iran despite US sanctions," said Russia's foreign ministry.

Iran's Foreign Minister Mohammad Javad Zarif tweeted that "US bullying is backfiring, not just because JCPOA is important, but because the world can't allow Trump & Co. to destroy global order."

The only support for the US position has come from Iran's regional rivals, notably Saudi Arabia and Israel, with the latter saying sanctions were "the sea-change the Middle East has been waiting for."

The Belgium-based SWIFT financial messaging service said yesterday it is suspending some unspecified Iranian banks' access to its messaging system in the interest of the stability and integrity of the global financial system, reported Reuters.

In a brief statement, SWIFT made no mention of US sanctions coming back into effect on some Iranian financial institutions as part of Trump's effort to force Iran to curtail its nuclear, missile and regional activities.