Trump, talking to reporters as he left the White House on a trip to Texas, said Iran was still unwilling to forswear nuclear weapons as demanded by the United States.
After the latest round of talks on Thursday in Geneva ended without a deal, Trump's patience appeared to be wearing thin.
"They don't want to say the key words, 'We're not going to have a nuclear weapon,'" Trump said. "So I'm not happy with the negotiation."
A massive US military presence is in the region waiting on Trump's order.
Asked about the potential for use of force, Trump said the United States has the greatest military in the world.
"I'd love not to use it but sometimes you have to," he said.
Trump spoke a day after negotiations between US envoys Steve Witkoff and Jared Kushner and Iranian officials in Geneva ended without news of a deal, although Omani Foreign Minister Sayyid Badr Albusaidi, who was a mediator, said the talks made significant progress.
Albusaidi told CBS earlier on Friday, before Trump's latest remarks, that a "peace deal is within our reach ... if we just allow diplomacy the space it needs to get there."
Trump said more discussions on Iran would take place later in the day.
He did not specify with whom, but Oman, which has been acting as a mediator between the two countries, sent its foreign minister to Washington on Friday for discussions on the issue with US Vice President JD Vance, according to a source familiar with the matter.
US Secretary of State Marco Rubio said in a statement on Friday that the State Department had designated Iran as a "State Sponsor of Wrongful Detention."
Rubio said for decades Iran has wrongfully detained Americans and citizens of other nations "to use as political leverage against other states," adding that the US could consider additional measures, including a potential "geographic travel restriction on the use of US passports to, through, or from Iran."
Trump planned events in Corpus Christi later on Friday and then was to fly to Palm Beach, Florida, for the weekend at his Mar-a-Lago club.
A source briefed on the internal White House deliberations told Reuters that Trump is "very clear-eyed on all the options before him."
There is a recognition internally that taking on Iran would be more difficult than the US capture of Venezuelan leader Nicolas Maduro, and there was also internal pessimism as to whether negotiations will bear fruit, the source said.
"Nobody is super optimistic about the negotiations," the source said.
