A flight Instructor in a C172 reported the Tower Controller issued them a turn towards mountainous terrain and a Helicopter on a conflicting course to avoid additional traffic which they reported they had in sight.

Narrative

We Aircraft X were instructed by tower to fly 'East of the building for a right base Runway XXL' at ZZZ. As we passed the body of water; Tower reported an FA-18 Hornet Aircraft Y on the right downwind; which I reported in sight. Another Aircraft Z arrived; and tower instructed him to 'cross mid-field at 2000 ft.' South of the body of water; my student turned to comply with tower instruction and descended towards pattern altitude of 1500 ft. Tower began chastising the Aircraft Z for not following instructions. I observed Aircraft Z turning towards me and advised tower that I had Aircraft Z traffic in sight. Tower cleared Aircraft Z to land '#2 behind the Hornet' and then reported me as traffic. He did not acknowledge having me in sight. Tower then instructed me to 'turn left and fly to the Northeast.' There was rapidly rising terrain to my left; and significant shifting and turbulent winds. I reiterated to tower that I had traffic in sight; but they continued to insist that I turn into the dangerous terrain to my left.As I turned; I saw a helicopter; Aircraft A; coming the other direction around the mountain that I was struggling to miss; and had to bank even further left at slow airspeed to avoid him. Through about 200 degrees of turn Tower told me to turn right back into the terrain and the area of the helicopter. I refused to turn right and told them that I would continue my left turn and had the helicopter in sight. Why would you turn an aircraft away from traffic he had in sight? I lost sight of both aircraft because tower turned me away. Why would you turn any aircraft into rapidly rising terrain? Why was a higher altitude aircraft given right of way? Why was the Hornet not transmitting on VHF at a Civilian Airport? Why was tower chastising an aircraft with multiple other aircraft in a pattern on tower frequency? Unfortunately; Tower is re-known throughout the region for this. Subsequent discussion with the Tower Supervisor was not productive. He seemed completely oblivious of the dangerous situation they put me in; and said that 'our radar showed that you would be clear of the terrain.' I'm not aware of a Primary Radar at ZZZ that has the capability of keeping an aircraft clear of terrain below 500 ft. AGL; and I seriously doubt that anyone in the tower is aware of the stall characteristics of an airplane in a high angle of bank in turbulent air next to a steep mountain.