Mark Esper won Senate confirmation by a vote of 90-8 and was sworn in at the White House by Supreme Court Justice Samuel Alito in a ceremony attended by Trump and several members of Esper's family.
The two archrivals have recently been firing off salvos against each other, increasing tension not only in the Gulf but also around the world.
In a letter, the Turkish defence minister called for mutual respect and friendship after the US backtracked on offering F-35 training to pilots in response to Turkey purchasing Russian-made S-400 defence systems.
President Donald Trump announced Shanahan's departure in a tweet and said Army Secretary Mark Esper would be the new acting Pentagon chief.
The United States ratcheted up pressure on Iran, announcing the deployment of 1,000 additional troops to the Middle East, as Tehran set a 10-day countdown for world powers to fulfil their commitments for a nuclear deal abandoned by Washington.
"We discussed the S-400 subject with Russia. Indeed the S-400 issue is settled," Turkish President Erdogan was cited as saying. "I think they will start to come in the first half of July."
Washington says it will no longer train Turkish pilots on F-35 fighter jet following Ankara's decision to purchase Russian S-400 missile defence system.
"China can and should have a cooperative relationship with the rest of the region," US Acting Defence Secretary Patrick Shanahan said at the Shangri-La Dialogue in Singapore.
Oman's goodwill and relationships with the Muslim world and the West could prove vital, as they have historically, to ensuring that US-Iran tensions don't boil over.
Comments by Pentagon chief Patrick Shanahan come amid a war of words between Washington and Tehran as both sides accuse the other of dangerously ratcheting up tensions.
Speaking at a news conference with his Polish and Romanian counterparts, Foreign Minister Mevlut Cavusoglu said Turkey is taking the utmost care to ensure that the S-400 system is under full Turkish control.
Acting US Defense Secretary Patrick Shanahan's comments came a day after the Pentagon suspended the delivery of equipment related to the F-35 fighter jet to Ankara.
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