US President Donald Trump said on Monday that negotiations with Iran were ongoing despite Tehran's denials and the Islamic Republic was facing a "last chance before decapitation."

Speaking to reporters at the White House, Trump said he agreed to continue to pursue talks with Iran at the request of Saudi Arabia, the United Arab Emirates, Qatar and other countries.

Iran's foreign ministry denied on Monday that negotiations with Washington were taking place, but Trump insisted they were. "We are talking right now," he said.

"This is a last chance for them to sign a good document," the US president added. "I want to give them every last chance before decapitation."

The talks are focused on reopening the Strait of Hormuz, which Trump said could come "literally by tomorrow," and the denuclearisation of Iran, which he said could "take a little while."