Donald trump announced that he would impose” the highest level of economic sanctions ” against Iran, violating the international nuclear agreement and the UN resolution, decisively breaking with US allies in Europe and potentially provoking a new crisis in the Persian Gulf.

In a statement at the White House, Trump said this decision meant that the US would “exit the Iran deal” agreed with other major powers in 2015, and warned that “any nation that helps Iran in its quest for nuclear weapons could be strongly sanctioned”.

He then signed an executive order reimposing sanctions on any foreign company that continues to do business with Iran.

The leaders of the UK, France and Germany, who are also parties to the agreement known as the Joint Comprehensive Plan of Action or JCPOA, issued a statement soon after Trump’s declaration expressing their “regret and concern” and emphasising their “continuing commitment” to the deal.

“We urge the US to ensure that the structures of the JCPOA can remain intact, and to avoid taking action which obstructs its full implementation by all other parties to the deal,” the statement said.

Iran’s president, Hassan Rouhani, said he believed the agreement could still survive if other negotiating partners defied Trump.

But Rouhani warned that he has instructed the country’s atomic energy agency to prepare to restart enrichment of uranium at an industrial level in a few weeks’ time should the deal collapse completely.

“This is a psychological war, we won’t allow Trump to win. I’m happy that the pesky being has left the [agreement],” the Iranian president said.

In his White House remarks, Trump called the Iran agreement “a horrible one-sided deal that should never, ever have been made”. He said: “It didn’t bring calm, it didn’t bring peace, and it never will.”

Even before Trump made his announcement at the White House, tensions were visibly rising. The Israeli military warned of “irregular activity of Iranian forces in Syria” and ordered bomb shelters to be readied in the Golan Heights.

In reintroducing sanctions, Trump referred to claims by Israeli prime minister Benjamin Netanyahu that Israel had documents detailing past Iranian work on nuclear weapons development.

Netanyahu, who has been a vocal critic of the deal and called for Trump to “fix it or nix it”, said on Tuesday: “Israel fully supports President Trump’s bold decision today to reject the disastrous nuclear deal with the terrorist regime in Tehran.”

He said Israel opposed the deal as it “paves Iran’s path to an entire arsenal of nuclear bombs”.

The “removal of sanctions under the deal has already produced disastrous results,” Netanyahu said. “Israel thanks President Trump for his courageous leadership,” he added.

John Bolton, Trump’s national security adviser, said the sanctions would apply immediately to new deals, but that companies would have three or six-month grace periods to get out of existing contracts.

The US Treasury issued a factsheet providing a timetable of restoration of sweeping sanctions against global companies trading or investing with Iran.

Bolton said that the US would also cease to abide by the UN security council resolution that endorsed the July 2015 deal. He said: “We are not using the provisions of UNSC 2231 because we are out the of the deal.”

The announcement marks a decisive break from the nuclear deal that the US agreed in July 2015 with its main European partners along with Russia, China and Iran, in which Tehran agreed to significant curbs on its nuclear programme in return for sanctions relief. The deal was endorsed by a UN security council resolution soon afterwards.

Barack Obama, whose administration negotiated the deal, described Trump’s violation of the agreement as “a serious mistake”.

“Without the JCPOA, the United States could eventually be left with a losing choice between a nuclear-armed Iran or another war in the Middle East,” he said in statement.

Trump’s unilateral and dramatic withdrawal is likely to raise tensions rapidly in the Middle East, already inflamed by conflicts in Syria, Iraq and Yemen.

Much will now depend on reaction in Tehran, where hardliners have campaigned against the agreement and pressed for Iran to revive a full range of nuclear activities and throw out UN inspectors.

The other parties to the 2015 nuclear agreement with Iran have said they will try to keep the deal alive, but it is far from clear that will be possible in the face of the sanctions that Trump has reintroduced, targeting companies around the world for doing business with Iran.

The decision represents a rejection of repeated, concerted entreaties by Washington’s European allies to keep faith with the nuclear deal. Trump made his announcement a day after the UK foreign secretary Boris Johnson, returned home after an abortive round of last-minute lobbying for the JCPOA in Washington.

The French president, Emmanuel Macron, and Germany’s chancellor, Angela Merkel, had come to the White House in the weeks before. Their failure to sway Trump was a striking measure of how little influence Europe has on this White House, which has sided instead with Israel, Saudi Arabia and the United Arab Emirates on a major strategic decision.

The JCPOA, agreed in Vienna in 2015, led to a rapid and drastic reduction in Iran’s nuclear programme. It reduced its stockpile of low-enriched uranium by 98% to just 300lbs, far below what would be required if it attempted to make enough fissile material for a single bomb.

Iran also took down about 13,000 of its centrifuges, leaving just over 5,000 of its oldest-model machines in place. It ceased all enrichment at its underground facility at Fordow, which – like other Iranian nuclear sites – was put under continuous international monitoring by the International Atomic Energy Agency (IAEA). The IAEA had repeatedly confirmed that that Iran was in compliance with the restriction it had agreed to in 2015.

Karim Sadjadpour, a senior fellow at the Carnegie Endowment for International Peace, warned: “By withdrawing from the JCPOA, Trump hastens the possibility of three disparate but similarly cataclysmic events: an Iranian war, an Iranian bomb, or the implosion of the Iranian regime.”

“Iran looms large over major US national security concerns including Syria, Iraq, Afghanistan, cyber, energy security, terrorism, & obviously nuclear proliferation,” Sadjadpour said in a tweet. “The opportunities for direct conflict are numerous.”

The other parties to the 2015 agreement have said they will try to keep the deal alive, but it is far from clear that will be possible in the face of the sanctions that Trump has reintroduced, targeting companies around the world for doing business with Iran.

After announcing the abrogation of the Iran deal, Trump insisted he would press ahead with his bid to reach a nuclear agreement with the North Korean leader, Kim Jong-un, at a summit due to take place in the coming way.

He revealed that the secretary of state, Mike Pompeo, was on the way to Pyongyang, apparently to finalise arrangements.

Pompeo told pool reporters on his plane headed to North Korea that he doesn’t know who he will meet with in Pyongyang: “We’re prepared to meet anyone who can speak on behalf of the North Korean government and give us solid answers so we’re prepared.”