In an interview with CNN's Chris Cuomo on "New Day," McMaster, who was speaking right before President Donald Trump announced that he plans to unveil new sanctions on North Korea, also said the US has options in dealing with the rogue regime.
"It gave the Iranian regime all the benefits upfront," he said. "And then the incompleteness of the deal ... which really could give the regime cover to advance a nuclear program."
He said Trump is looking at the entire situation in Iran, not just its nuclear program, when deciding on the deal.
"We've taken a holistic look at this," McMaster said. "What's different about the President's approach is he didn't just look at the Iran deal -- he placed his decision on the Iran deal on broad context of how we protect American citizens, American interests, how we protect our allies and partners from Iran's broad range of destabilizing behavior."
McMaster pointed to Iran efforts to perpetuate violence across the Middle East, boost the Assad regime in Syria and support terrorist organizations.
He added: "I know what the decision is but when the President reveals that, when he talks about it, he'll place it context of the broader approach to Iran."
Trump said Wednesday
he has decided how he is going to proceed on the Iran nuclear deal struck by the Obama administration that he has long derided.
"Well, I have decided," Trump told reporters who pressed him for an answer before they were escorted out of his meeting with Mahmoud Abbas, the president of the Palestinian Authority.
Trump, however, declined to disclose his decision, teasing to a future date.
"I'll let you know what the decision is," Trump said, smiling.
Secretary of State Rex Tillerson emphasized Wednesday
that the US is asking its allies to factor Iran's broader activities, not just its nuclear program, in considering additional sanctions against the longtime US foe.
"We also have been making the case to our allies that you share our concern about Iran's behavior ... We believe they're now looking more carefully and seriously at that as a means to push back on this other behavior of Iran's that they agree with us is just simply unacceptable," he said.
Trump says additional sanctions coming against North Korea
Trump delivered a doomsday warning to North Korea in his UN address on Tuesday and mocked its young leader. He warned the US would "totally destroy North Korea" if forced to defend itself or its allies, adding that while the US has "great strength and patience," its options could soon run out.
Asked Thursday whether he was planning to announce new sanctions on North Korea, Trump told reporters "yes" but did not provide additional details. He is due to make the announcement during a working lunch
later Thursday with the leaders of South Korea and Japan.
In his "New Day" interview, McMaster wouldn't share US military plans for how to handle North Korea, but said there are options on the table.
"We have tremendous military capability, along with our allies, and we practice that capability and have our forces as a high level of readiness for this problem," McMaster said, "but what the President has done is directed us to integrate what we are doing diplomatically."
The national security adviser also defended Trump's use of the nickname "rocket man" for Kim, saying the rhetoric works.
"It's an accurate term," he said. "This is someone who has compromised everything for his nation in the pursuit of this capability. He is disadvantaging his own people every day by investing in what the President said is a suicide mission. This is not going to keep his people safer but puts them on a path of devastation."