Should i continue this Friendship?

So a few months back this guy told my friend he liked her. I was there in the car when he called her. They never pursued to dating, because she got kind of manipulative, meaning she wanted to control the people he was talking to. So one day, he told me he liked me,(I am engage and he is aware of this) He said i was very pretty and that he would pursuit dating me if i wasn't engaged. He stated he was scared off by my friend and would never date her. But what is bothering me is, he has told me that she is an easy girl and if he wanted he would have slept with her. He has shown me the messages she has sent him, and it does sound creepy. I had to confront her because she sent me an "accidental" message saying "I cant stand how she looks at him". She said she thought i liked him, I was very upset because i am in love with my fiance and about to get married in four months. I explained all of this, and she did apologize. Now four weeks later she said the same thing. I got so upset i came clean and told her he was the one telling me things about her and how he didn't want anything with her, and that he liked me. I was trying to look out for her but i was so upset i blurted everything out. I guess she is really into him , she told him everything i said to him, so he showed me again another message from her saying "ooh i bet if i was as pretty as her you wouldn't hesitate dating me". Again i was upset. Ugh now i don't know if i should continue my friendship with her because we have talked so many times about this subject, that is getting in the way of my job. Because i work with both of them. I can not stand looking at him, i feel hatred towards him, for the way he has expressed about her. So should i continue being her friend. Even though it aggravates me seeing her get hurt from someone who wants nothing with her?? and do you think shes jealous or backstabbing me acting that way?