US President Donald Trump expressed renewed optimism on Tuesday morning over negotiations with Iran, saying that there was a "good chance” of signing a deal in “two or three days".

“We’re very close to having a very, very good, strong, powerful deal,” Trump said, as the Middle East was still reeling from Iran and Israel exchanging fire the previous day in the biggest blow yet to the strained truce in the Iran war.

“If we go and bomb — which we could do very easily if we want, and we spend another two or three weeks bombing — they’ll have nothing left whatsoever. But you won’t have the Strait (of Hormuz) open for months.”

“If we do the bombing, you know, a lot of people are going to be killed. Who wants to do that? I don’t," the US president told journalists at John F Kennedy International Airport in New York after watching the NBA Finals on Monday night.

Trump did not provide any details on why there was reason for renewed optimism.