Trump said his plan to limit the entry of people from Muslim countries was necessary because the world is "a total mess."
A draft executive order published in the Washington Post and New York Times said refugees from war-torn Syria will be indefinitely banned, while the broader US refugee admissions program will be suspended for 120 days as officials draw up a list of low risk countries.
Meanwhile, all visa applications from countries deemed a terrorist threat -- Iraq, Syria, Iran, Sudan, Libya, Somalia and Yemen -- will be halted for 30 days.
Alongside this, the Pentagon will be given 90 days to draw up a plan to set up "safe zones" in or near Syria where refugees from its civil war can shelter.
It is unclear whether the published draft is the final version, or when Trump will sign it, but it would make good on his campaign promises.
Trump told ABC News late Wednesday that his plan to limit the entry of people from Muslim countries was necessary because the world is "a total mess."
"No it's not the Muslim ban, but it's countries that have tremendous terror," Trump said. "And it's countries that people are going to come in and cause us tremendous problems."
Trump refused to say which countries were on the list, but he did say he believed that Europe "made a tremendous mistake by allowing these millions of people to go into Germany and various other countries," describing it as "a disaster."
Trump was asked if he worried that the limits would anger Muslims around the world.
"Anger? There's plenty of anger right now. How can you have more?" he said.
"The world is a mess. The world is as angry as it gets. What, you think this is going to cause a little more anger? The world is an angry place. ... We went into Iraq. We shouldn't have gone into Iraq. We shouldn't have gotten out the way we got out. The world is a total mess."
Trump vowed to impose "extreme vetting" for people who seek to enter the United States from certain countries.
"And I mean extreme. And we're not letting people in if we think there is even some chance of some problem," he said, without defining how that process would differ from current strict entry requirements.
Trump's hard line attitude towards what he calls "radical Islamic terrorism" was one of the most controversial themes of his election campaign.
Rights groups have accused him of stigmatising a global faith, and some experts warn that offending America's Muslim allies will hurt the fight against extremism.
"Turning our back on vulnerable refugees doesn't protect the United States," said Michael Olsen, former director of the US National Counter terrorism Center.
"In fact, it plays into ISIS's false narrative that we are at war with all Muslims instead of terrorist organisations," he told watchdog Human Rights First.
Trump also vowed to "eradicate ISIS from the face of the earth", which proved popular with US voters.
Ryan Crocker, former US ambassador to Afghanistan and Iraq, told the group that the executive order would threaten refugees who risked their lives to help US troops.
"Banning the admission of Syrian refugees contradicts American values, undermines American leadership and threatens American security by making the ISIS case that we are at war with Islam," he argued.
Other former officials, however, were not worried by the pending order -- suggesting that while it has little use as a security measure, anger would blow over.
James Jeffrey, who was deputy national security adviser under former president George W. Bush, said: "I don't think there'll be much of a change in anything."
Jeffrey argued that even under former president Barack Obama, the United States had allowed in very few Syrian refugees -- only 18,000 since the war began in 2011.
Meanwhile, allies in the Sunni Muslim world are far more concerned by the immediate threats posed by Iran and the Islamic State group than by US visa law.
"So I don't see a major negative in foreign affairs from this," said Jeffrey, now a fellow of the Washington Institute for Near East Policy.
"We had a bad reputation no matter what we did even when we were being at our very very tippy-toe best with Barack Obama. It doesn't matter," he told AFP.
"In populations there is a great deal of scepticism about the United States. It's hard-wired, regardless of the president, no matter what we do."
The possible draft signing on Thursday would be the latest in a daily series of executive orders rolled out by Trump's administration since he took office on Friday -- touching on national security, immigration, and health care.
Also Thursday, Trump is to speak before Republican lawmakers at their winter retreat in Philadelphia -- an opportunity for him to reassure some of his party faithful about the actions of his provocative first week at the White House.