"Today's action follows a series of aggressive behaviors by the Iranian regime in recent weeks including shooting down of USA drones".
Trump said the supreme leader was responsible for what Trump called "the hostile conduct of the regime". The President's order will deny Iran's leadership access to financial resources and authorises the targeting of persons appointed to certain official or other positions by the Supreme Leader or the Supreme Leader's Office.
They bar U.S. companies from trading with Iran, but also with foreign firms or countries that are dealing with Iran. But we see sanctions as two sides of the same coin. "How can we start a dialogue with somebody whose primary occupation is to put more sanctions on Iran?".
Mr Trump warned Iran "cannot ever have a nuclear weapon" and does not want "money going out to sponsor terror".
Tensions between the two countries have been escalating in recent weeks.
Iran also denied cyber-attacks launched by the U.S. on its rocket launch systems had not hit their mark. Khamenei and his hardline allies are believed to have billions stockpiled and the new sanctions will directly target these cash assets, according to Treasury Department officials.
USA officials say United States military cyber forces struck Iranian military computer systems on Thursday, crippling IRGC computer systems.
The administration is seeking to target Iran's top officials, including its foreign minister, Javad Zarif, who negotiated the landmark nuclear deal with the former Obama administration. Iran claims the drone was in its territorial waters, while the United States denies this.
"We do not seek conflict with Iran or any other country", Trump said to reporters in the Oval Office at the signing ceremony. "When the Iranian regime decides to forgo violence and meet our diplomacy with diplomacy, it knows how to reach us", Pompeo said.
While the Security Council meeting was underway, Iran's UN Ambassador Majid Ravanchi told reporters that a dialogue with the US wasn't possible at the moment.
IDF said to increase alert amid Iran tensions
Reiterating comments made by Trump, Bolton said: "our military is rebuilt, new and ready to go - by far the best in the world". Iran's foreign minister said Bolton was trying to force the US into a conflict with Iran.
"Why are we protecting the shipping lanes for other countries (many years) for zero compensation", Trump said on Twitter.
The U.S. official said the deterrents include cameras, binoculars and ships, including from the United States.
Ravanchi spoke as the U.N. Security Council met behind closed doors over Iran at the request of the United States.
Iran said on Thursday it downed the unmanned aircraft in Iranian airspace.
The sanctions are expected to target Iran's supreme leader as part of the response to the country shooting down an American surveillance drone in global waters. However, Trump says he canceled the strikes minutes before they were to happen, because they would have killed too many people.
A military strike ordered in retaliation for the downing of the United States drone was called off by Trump at the last minute. USA officials have not offered comments on the issue.
This was followed by a series of attacks on tankers in the Gulf, which the White House said Iran was behind.
On Monday, Pompeo held separate talks with King Salman and Crown Prince Mohammed bin Salman in the Saudi port city of Jiddah to discuss the escalation with Iran.
"We are very concerned. If they want something beyond the JCPOA, they should offer something beyond the JCPOA; with worldwide guarantees", Hesameddin Ashena said, using the official name of the pact, the Joint Comprehensive Plan of Action, Reuters reported.