US President Donald Trump says allegations of Russian collusion ‘total fabrication’

US President Donald Trump speaks at his campaign rally at the Big Sandy Superstore Arena on August 3, 2017 in Huntington, West Virginia. (Getty Images)

US President Donald Trump has strongly rejected allegations that Russia colluded with his election campaign during the 2016 US presidential race, describing the accusations as "total fabrication" and a “fake story.”

"We didn't win because of Russia. We won because of you," Trump said Thursday at a campaign-style rally in Huntington, West Virginia.

"The reason why Democrats only talk about the totally made-up Russia story is because they have no message, no agenda, and no vision," he said. "The Russia story is total fabrication. It's just an excuse for the greatest loss in the history of American politics."

Trump said his enemies were "trying to cheat you out of the leadership you want with a fake story that is demeaning to all of us and most importantly, demeaning to our country and demeaning to our constitution."

His comments come amid a sweeping federal probe investigating whether officials in Trump’s election campaign coordinated with Russia to help the Republican president defeat his Democratic rival Hillary Clinton in last year’s election.

The Wall Street Journal revealed on Thursday that US Justice Department Special Counsel Robert Mueller has impaneled a grand jury to investigate Russia's alleged interference.

According to the paper, the probe is intensifying and could stretch for months.

Mueller, who was FBI director from 2001 to 2012, is also reportedly investigating financial records of Trump’s associates.

The establishment of the grand jury will allow Mueller to subpoena officials and get sworn testimony which may lead to criminal indictments.

"It's a significant escalation of the process," national security attorney Bradley Moss told AFP.

"You don't impanel a grand jury unless your investigation has discovered enough evidence that you feel reflects a violation of at least one, if not more, criminal provisions," he said.

Trump's desire for better ties with Moscow has been hampered by accusations from US intelligence agencies that Russia operated a series of high-profile cyber attacks to change the outcome of the November 8 presidential election in favor of Trump.

Trump warned Thursday that Washington's ties with Moscow are at a “very dangerous low," and blamed Congress for the situation, a day after he reluctantly signed into law a sanctions bill against Russia.

"Our relationship with Russia is at an all-time & very dangerous low," Trump said in a Twitter post. "You can thank Congress.”

Congress passed the new sanctions package last week against Russia, Iran and North Korea. The bill was passed with overwhelming margins, eliminating the prospect of a presidential veto.

Trump signed the bill on Wednesday but strongly criticized it, calling the legislation "significantly flawed" with "unconstitutional provisions."