US President Donald Trump has threatened Iran after blaming it for an attack on the US embassy in Iraq.

The compound in Baghdad was attacked by demonstrators furious over the deaths of militia members in US air strikes.

 Trump tweeted that Iran "will pay a very big price" for any damage or loss of life. "This is not a warning, it is a threat," he said.

But Iran's Supreme Leader Ayatollah Ali Khamenei responded by saying the US "can't do a damn thing".

Iraqi specialist Dr. Ronen Zeidel from Tel Aviv University told KAN's Mark Weiss that Iran hopes the protests will divert attention from the ongoing crisis in Iraq.