The lifting of sanctions on Iran as a result of its nuclear deal with world powers will be a harmful development if it uses the extra money to fund "nefarious activities", Saudi Arabia's Foreign Minister Adel al-Jubeir told Reuters on Tuesday.

He said in an interview, the first direct Saudi comment on the lifting of sanctions on its bitterest regional rival,that Saudi Arabia would never negotiate on "our faith and our security". On an international level, the continued engagement by the United States was the key to maintaining stability.

Saudi Arabia has in public always welcomed Iran's nuclear deal on the condition that it includes a tough inspections regime and that sanctions could be quickly reinstated if Tehran broke the rules.

But in private, officials have voiced concern that the deal would allow Iran greater scope to back militias and other allies across the region thanks to the extra funds it can access after sanctions are lifted and the reduced diplomatic pressure.

"It depends on where will these funds go. If they go to support the nefarious activities of the Iranian regime, this will be a negative and it will generate a pushback. If they go towards improving the living standards of the Iranian people then it will be something that would be welcome," he said.

Asked if Saudi Arabia had discussed seeking a bomb in the event that Iran managed to obtain one despite the deal over its atomic programme, he replied:

"I don't think it would be a logical to expect us to discuss any such issue in public and I don't think it would be reasonable to expect me to answer this question one way or another.

"There are two things that we don't negotiate over in Saudi Arabia. Our faith and our security. We will do whatever we need to do in order to protect our people and our nation," he added.