Speaking at the United Nations General Assembly in New York, Trump framed the choice as whether to allow Iran to rebuild through a negotiated settlement or take further action against the Islamic Republic.
His remarks came days after he told Axios that he was approaching a critical juncture over whether to restart large-scale attacks against Iran.
Trump raises prospect of Iran deal
“I have a big decision to make,” Trump said during his UN address.
He questioned whether a deal could be reached with Iran that would allow the country to rebuild and become “a far greater country than it ever was before”.
Trump then raised the possibility of further military action, saying he could “annihilate the Islamic Republic” to prevent it from threatening other countries again.
The comments echoed his remarks to Axios last week, when Trump said he was considering whether to resume massive attacks in an effort to bring the conflict to an end.
Trump points to November 3 midterms
Despite presenting the possibility of further military action, Trump said he believed the US and Iran could reach a deal shortly after the November 3 midterm elections.
“I believe we'll make a deal right after the election because it doesn't make sense for them not to,” Trump said.
He added that Iran was waiting to see how he performs in the midterm elections.
Trump's comments came as the Iran conflict remains a major issue for his administration, with the fighting also contributing to disruptions in regional energy and shipping routes.
Iranian delegation walks out
Trump's speech also triggered a visible diplomatic reaction from Iran.
Members of the Iranian delegation walked out of the UN General Assembly as the US president spoke about the conflict and his administration's military actions against Tehran, according to the Associated Press.
The walkout came amid continuing tensions between Washington and Tehran, even as diplomatic channels remain a possible avenue for ending the conflict.
Trump defends military campaign
Trump defended his decision to continue the confrontation with Iran, saying he did not want threats to remain unresolved.
“As president of the most extraordinary nation in history,” Trump said, “I have no interest in leaving dangers to grow for another day. I do not believe in letting problems fester.”
He also reiterated his commitment to preventing Iran from acquiring a nuclear weapon, an issue the White House has cited in defending its military campaign.
Iran signals possible opening on Hormuz
Trump's remarks came as Tehran has also indicated a potential willingness to engage in negotiations.
According to reports cited by Reuters, Iran has offered to reopen the Strait of Hormuz within seven days if the US eases military pressure and lifts its blockade.
The proposal was reportedly conveyed to Washington through mediators and includes talks aimed at ending the hostilities.
The developments come as the conflict continues to affect shipping and energy markets, with the strategically important Strait of Hormuz remaining at the centre of the regional crisis.