Iran-US war latest: Tehran retaliates after Trump orders fresh strikes on military sites

As we reported yesterday, the fragile ceasefire in the Middle East is under renewed pressure this week as Iran accused the United States of violating the agreement by striking targets near the contested Strait of Hormuz.

But behind the headline issues, a source close to negotiations told Iran’s Fars news agency that the last sticking point to be agreed concerns some $24bn (£17.85bn) in Iranian funds frozen in banks around the world.

As the United States pushes for an end to the three-month war, Iran is expected to try to recoup around a quarter of the withheld payments stored overseas.

But Trump allies warn such a concession would come at a political cost for the US, looking too much like a win for Iran and weakening American leverage.

All of Iran’s frozen assets must be released and returned without conditions, Iran’s deputy secretary of the supreme nation council has demanded this morning.

He said: “We are seeking the release of all of Iran’s funds by the US and this is the legal right of Iran.”

Earlier, Iran’s Fars news agency reported that the last sticking point to be agreed to secure a peace deal between the US and Iran concerns some $24bn (£17.85bn) in Iranian funds frozen in banks around the world.

The conflict in the Middle East is entering its fourth month with negotiators yet to make a breakthrough, which would pave the way for an enduring peace.

Both sides have been back and forth with revisions of draft agreements to restore shipping through the Strait of Hormuz and lift the dual blockades, allowing for more comprehensive talks on the central nuclear issue.

But the effects of three months of conflict have been seismic, with an estimated 7,000 people killed in the region, major disruption to the global economy and more than a million people displaced from their homes – without delivering on any of Donald Trump’s stated objectives.

An Israeli soldier was killed while two reservists suffered injuries in a drone attack by Hezbollah in northern Israel, close to the border with Lebanon.

The soldier died after two drones launched by Hezbollah exploded in a military zone on the border during the attack, according to reports.

Separately, the Israeli military said it intercepted an apparent Hezbollah drone over an area of southern Lebanon where Israeli troops are operating.

Donald Trump has now threatened to blow up Oman after claiming that no single country would have control over the Strait of Hormuz.

“Nobody’s going to control it,” Trump said, responding to reports that Iran and Oman would control shipping through Hormuz as part of the deal to end the war.

Trump added: “It’s international waters and Oman will behave just like everybody else or we’ll have to blow them up. They understand that, they’ll be fine.”

Oil prices jumped about 2 per cent in early trading after ​the US military launched additional strikes overnight on an Iranian ‌military site, escalating tensions even as Washington and Tehran negotiate to end their three-month conflict.

Brent crude futures rose $1.90, or 2.02 per cent, to $96.19 ​a barrel, while the more active ​August contract gained $1.64 or 1.78 per cent, to $93.89.

The July ⁠contract is set to expire on Friday.

The Trump administration has placed additional sanctions on Iran as part of a sprawling economic pressure campaign during the war, this time targeting the country’s newly created agency that is trying to control shipping through the Strait of Hormuz.

The sanctions were announced last night after US forces carried out strikes on an Iranian military facility after downing Iranian attack drones.

“The Iranian military’s latest attempt to extort global maritime trade is proof that Economic Fury has left the regime desperate for cash,” treasury secretary Scott Bessent said in a statement.