UPDATE 7-Iran says it will confront any U.S. threat, Trump eyes new sanctions

By Parisa Hafezi and Lisa Barrington

* Tensions high after Iran downed unmanned US drone

* Trump says aborted retaliatory strike to avoid any deaths

* Iran says won't allow its borders to be violated

* British minister to visit Iran on Sunday (Adds Trump quotes, Pentagon spokeswoman)

By Parisa Hafezi and Lisa Barrington

DUBAI, June 22 (Reuters) - Iran said on Saturday it would respond firmly to any U.S. threat, the semi-official Tasnim news agency reported, amid escalating tension between Tehran and Washington over the shooting down of an unmanned U.S. drone by the Islamic Republic.

On Thursday, an Iranian missile destroyed a U.S. Global Hawk surveillance drone. Tehran repeated on Saturday that the drone was shot down over its territory. Washington said the incident happened in international airspace.

U.S. President Donald Trump said on Friday he called off a military strike to retaliate because it could have killed 150 people, and signalled he was open to talks with Tehran.

"Regardless of any decision they (U.S. officials) make ... we will not allow any of Iran's borders to be violated. Iran will firmly confront any aggression or threat by America," Foreign Ministry spokesman Abbas Mousavi told Tasnim.

Speaking in Washington on Saturday before heading to the U.S. presidential retreat at Camp David, where he said he would deliberate on Iran, Trump said the U.S. government was imposing new sanctions on Tehran.

"We are putting additional sanctions on Iran," Trump told reporters. "In some cases we are going slowly, but in other cases we are moving rapidly."

Military action was "always on the table," the president added, but he said he was open to reversing the escalation and could quickly reach a deal with Iran that he said would bolster the country's flagging economy.

"We will call it 'Let's make Iran great again,'" Trump said.

Worries about a confrontation between Iran and the United States have mounted despite Trump saying he has no appetite to go to war with Iran. Tehran has also said it is not seeking a war but has warned of a "crushing" response if attacked.

"Any mistake by Iran's enemies, in particular America and its regional allies, would be like firing at a powder keg that will burn America, its interests and its allies to the ground," the senior spokesman of Iran's Armed Forces, Abolfazl Shekarchi, told Tasnim on Saturday.

A senior commander of the elite Revolutionary Guards struck a similarly defiant note, in comments quoted by the Islamic Republic News Agency (IRNA).

"This is our response to a violation of Iranian space and if the violation is repeated then our response will be repeated," said Brigadier General Amirali Hajizadeh, head of the Guards' aerospace division.

"It's possible that this infringement of the Americans was carried out by a general or some operators."

A Pentagon spokeswoman, Commander Rebecca Rebarich, said on Saturday: "We stand by where we said the aircraft was operating in international airspace."

Iran's Foreign Ministry summoned a diplomatic representative of the United Arab Emirates on Saturday because the UAE allowed the drone that was shot down to be launched from a U.S. military base on its territory, the Fars news agency reported.


FLIGHTS REROUTED

Tensions in the region began to worsen significantly when Trump pulled out of a 2015 nuclear deal between Iran and six powers and reimposed sanctions on the country. The sanctions had been lifted under the pact in return for Tehran curbing its nuclear programme.

Over the past weeks the United States and Iran's main regional rival Saudi Arabia have also blamed Iran for attacks on two oil tankers last week in the Gulf of Oman and on four tankers off the United Arab Emirates on May 12.

Both incidents happened near the strategic Strait of Hormuz, a major conduit for global oil supplies.

Iran has denied any involvement in those incidents, but world powers are calling for calm and sending in envoys for talks to try to lower the temperature of a dispute that is already helping push up the price of oil.

A senior Arab diplomat said the sharply increased tensions would further harm the crisis-hit Middle East region.

"Confrontation, whatever we think about Trump or Iran, will be disastrous for everyone," the diplomat told Reuters on condition of anonymity.

The U.S. Federal Aviation Administration on Thursday issued an emergency order prohibiting U.S. operators from flying in an oversea area of Tehran-controlled airspace over the Strait of Hormuz and Gulf of Oman. Some other international airlines are taking related precautions.

But Iran said on Saturday its airspace was "safe and secure" for all planes to cross, Tasnim reported.

German Chancellor Angela Merkel called on Saturday for a political resolution of the crisis, adding: "That is what we are working on."

Britain's Foreign Office said Middle East minister Andrew Murrison would raise concerns about "Iran's regional conduct and its threat to cease complying with the nuclear deal" during a visit to Tehran on Sunday. France sent an envoy to Iran earlier in the week.

Iran has threatened to breach the deal if the European signatories to the agreement fail to salvage it by shielding Tehran from U.S. sanctions.

"The Europeans will not be given more time beyond July 8 to save the deal," Mousavi said, referring to Iran's deadline of 60 days that Tehran announced in May.

Separately, Iran has executed a former contract employee for the aerospace organisation of the Ministry of Defence on charges of spying for the U.S. Central Intelligence Agency, the IRIB news agency reported on Saturday.

Jalal Hajizavar had left his post nine years ago and was convicted by a military court after an investigation which discovered documents and spying equipment at his home, the report said. (Additional reporting by John Irish in Paris, Alistair Smout in London, Babak Dehghanpisheh in Geneva, and Nandita Bose and Idrees Ali in Washington; Writing by Parisa Hafezi; Editing by Alison Williams and Chizu Nomiyama)