US President Donald Trump threatened on Monday to hit Iran 'hard' after the two countries exchanged fire for the first time in weeks, as his Treasury secretary vowed to keep up a pressure campaign aimed at hobbling Tehran's economy.

'We're going to hit them hard,' US president says; Tehran source downplays flare-up, says it's 'limited and contained'; US vows to persist with economic pressure campaign

First exchange of fire between two countries in more than a month sends oil prices rising 3%